They say all ships will rise with the tide and this may be the case with crude oil, but don't expect WTI crude oil to rise as fast as Brent crude oil. The current rise of oil production is fueled by natural gas condensates and liquids, neither of which is used for producing the needed diesel. But if it break North then 74-75 is a target.
Oil prices gained on Wednesday, shaking off the effects of a strengthening dollar, after an inventory report showed US crude and gasoline stocks fell more than expected. Watch Gold's price at and around 1275 in here.
Oil's advance to $80 brings it to the level that OPEC's biggest member, Saudi Arabia, is reportedly seeking to cover the cost of weighty domestic spending commitments and raises hope that Nigeria's projected budget deficit in 2018 and next year could narrow considerably. "Oil fundamentals are now more bullish as robust demand faces supply disappointments", Goldman wrote in a note to clients.
However, Venezuela's economic crisis, and the prospect of additional United States sanctions following its May 20 elections could hit the market further.More news: Royal Challengers Bangalore vs Sunrisers Hyderabad Live Cricket Score T20 Match Today
The U.S.is the only source of supply growth that could fill the gap but even the prolific shale industry won't be able to resolve the brewing supply crunch.
At $80 a barrel, Asia's thirst for oil costs the region a whopping $1-trillion a year, more than twice what it was in 2015-16, the two years before the Opec-cuts, which started in 2017. That was not far off Tuesday's $71.92 a barrel - also a level not seen since November 2014.
The IEA said higher production from the USA would need to compensate for lower volumes from elsewhere.More news: Christine Lampard opens up about her pregnancy
Several banks have in recent days raised their oil price forecasts, citing tighter supplies and strong demand.
The current growth in oil prices already exceeds earlier predictions amid OPEC supply cuts and USA sanctions against Iran.
The IEA said global oil demand would average 99.2 million bpd in 2018, although USA bank Goldman Sachs said consumption would cross 100 million bpd "this summer".
Opec crude production eased in April to almost 31.7m b/d, even as demand for the cartel's crude is expected at a greater level of 32.2m b/d this year.More news: Liverpool Fans Livid with Club's Plans For Champions League Trophy Parade
A vast overhang of unwanted crude stocks has now vanished, investors are buying into the oil price rally more than at any time in the last four years and market watchers are beginning to talk again about oil prices returning to $100 per barrel and more.
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