Oil prices on course for $100 a barrel?
Oil extended gains again on Monday after US crude, or WTI, climbed to its highest level since November 2022 last week, going over $91 a barrel.
As a result, some analysts believe crude prices could hit the $100 a barrel milestone before year-end. China's stimulus policy, resilient US economic data, and ongoing output cuts from Saudi Arabia are among the bullish factors supporting the oil market's upside rally, as IGTV’s Angela Barnes explains.
Oil prices
Oil prices, specifically US crude WTI and Brent, are on the rise this morning.Oil - US Crude has increased by 0.75% and is now trading at around $90 a barrel, while Brent has gone up by 0.66% and is trading at around $94 a barrel. Last week, US WTI reached its highest level since November 2022, surpassing $91 a barrel. Some experts even predict that crude prices could hit $100 a barrel by the end of the year.
China's stimulus policy
The surge in oil prices is being driven by a few factors. Firstly, China's stimulus policy is boosting demand for oil, as it seeks to spur economic growth. Secondly, the US economy is showing resilience with positive economic data, leading to higher oil consumption. Lastly, OPEC Plus, a group of oil-producing countries, continues to cut its oil production, further supporting the upward movement in oil prices.
However, there was a significant increase in the number of rigs used for oil and gas exploration last Friday, marking the first substantial rise in a while. The total number of active rigs went up by 9 to 641, the largest increase since November 2022. This rise was mainly due to more gas rigs, with only two additional oil rigs coming into operation. It's important to note that such an increase in rig count had not been seen since early July.
OPEC Plus
Despite this, the current upward trend in oil prices is backed by various factors, such as China's stimulus measures, positive economic data from the US, and ongoing production cuts by OPEC Plus. These factors have fueled a rally in the oil market, with some analysts suggesting that the price of crude could surpass $100 a barrel once again before the year is over.
US crude WTI and Brent
To sum up, the recent rise in oil prices, especially US crude WTI and Brent, can be attributed to factors like China's stimulus policy, strong US economic data, and ongoing production cuts by OPEC Plus. However, the increase in the number of rigs last week, particularly in gas rigs, poses potential challenges to the ongoing rally in oil prices.
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