Crude oil futures closed higher on Tuesday (July 19) as markets were supported by the depreciation of the dollar and expectations that oil supplies on the world market are tightening.
- WTI crude futures were up $1.62, or 1.6%t, at $104.22 a barrel.
- BRENT crude futures were up $1.08, or 1%, at $107.35 a barrel.
Crude oil futures closed higher for the third day as the dollar continued to support the market. The dollar index against the six major currencies in a basket of currencies fell 0.64% to 106.6820.
Investors are anticipating a tightening of global oil supplies. It has been reported that U.S. President Joe Biden is preparing to announce measures to address global warming. Such measures may have a severe impact on oil production in the U.S.
Biden also failed to convince OPEC members to increase production to stem the rise in oil prices after a visit to Saudi Arabia last week.
The gas company PJSC, a major energy company in Russia, has announced force majeure in the supply of oil to several natural gas customers in Europe. Such movements may indicate that Russia intends to regulate gas supplies to Europe and will make energy supplies even tighter.
Force majeure is a part of the contract that serves to release both parties from legal obligations when uncontrollable events occur, such as labor disputes, terrorism and natural disasters.
The U.S. Energy Information Administration (EIA) will report crude oil inventories today. Analysts surveyed by S&P Global Commodity Insights predicted that crude oil inventories will decline by 200,000 barrels and refinery inventories will increase by about 800,000 barrels.
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Wednesday, July 20, 2022