5% increase in oil prices last week

According to Fars International Economic Group, citing Reuters, following concerns about supply and technical purchases that prevailed over concerns about a further increase in interest rates in the United States, oil prices rose by about 3% on Friday and reached a high of 9%. It arrived last week.

When interest rates increase, economic growth slows down and demand for oil decreases.

A barrel of Brent oil was sold with an increase of 1 dollar and 95 cents to 78.47 dollars, and a barrel of US crude oil was traded with an increase of 2 dollars and 6 cents to 73.86 dollars.

It is the first time that Brent oil and American crude oil end their work in the world markets at this high price since May 24.

Both oil indices, on average, ended last week with a 5% price increase.

After 2 months of stabilizing the price between 73 and 77 dollars, the price of Brent oil entered the zone for the first time since mid-April, which technically means that there has been a lot of buying of this type of oil.

Craig Erlam, senior oil market analyst, said the price increase was very strong last week due to the announcement of new cuts by Russia and Saudi Arabia.

Saudi Arabia’s state news agency reported on Monday that Riyadh will extend its voluntary production cut of 1 million barrels per day until August.

Russian Deputy Prime Minister Alexander Novak said after this statement, Russia will also reduce its oil exports by 500,000 barrels per day in August.

This represents a 1.5 percent drop in global supply and brings the OPEC+ production cut to 5.16 million barrels per day. OPEC+ produces 40% of the world’s oil production.

According to analysts, OPEC+ production cuts are expected to reduce supply and lead to some supply in the second half of 2023, which will push prices higher.

According to informed sources, OPEC is likely to have a positive view on oil demand growth next year.

Currently, 10.5 million barrels of Saudi crude oil are stored on water off the coast of Egypt in the Red Sea, which has halved since mid-June, according to oil statistics analysis firm Vertexa.

Energy companies in the United States added to the number of active oil and gas rigs this week for the first time in the last 10 weeks.

Another factor that boosted the price of oil was the depreciation of the dollar. The dollar fell to a two-week low after data showed U.S. job growth was weaker than expected but still positive enough to prompt the U.S. Federal Reserve to raise interest rates further.

The lower the value of the dollar, the cheaper the price of oil for the owners of other currencies.

Now, about 95% of investors expect US interest rates to rise another 0.25% at the July 25-26 meeting.

end of message/