Oil prices closed higher on Monday (May 22) as market sentiment was bolstered by expectations of a rebound in oil demand during the second half of the year. Despite the prevailing strength of the dollar and concerns surrounding the US debt ceiling, crude futures managed to gain ground.
WTI crude futures increased by 44 cents, or 0.61%, settling at $71.99 per barrel. Similarly, Brent crude futures saw a rise of 41 cents, or 0.54%, reaching a settlement price of $75.99 per barrel.
One of the driving factors behind the market’s positive outlook is the International Energy Agency (IEA) forecasting that oil demand will outpace supply by approximately 2 million barrels per day in the latter half of this year. Notably, China’s oil demand accounts for around 60% of the projected global demand for the year.
Additionally, investors anticipate the oil market to face tighter conditions due to production cuts enforced by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC Plus.
However, the market faced pressure from the strength of the dollar, alongside concerns that an interest rate hike by the US Federal Reserve (Fed) could potentially impact the economy and subsequently dampen oil demand. James Bullard, President of the St. Louis Fed, and Neil Kashcary, President of the Minneapolis Fed, have recently voiced their support for the Fed’s stance on raising interest rates to curb inflation.
Investors are eagerly awaiting the outcome of the ongoing debt ceiling negotiations between US President Joe Biden and US House Speaker Kevin McCarthy, with a mere 10 days remaining before the debt default deadline.
Furthermore, investors are also keeping a close eye on the impending release of crude stock data from the US Energy Information Administration (EIA) scheduled for tomorrow.
The Spot Market is Open
Tuesday, May 23, 2023
| Energy Updated at | USD Price | Change | %Change |
| Crude Oil 10.35 | 72.37 | +0.32 | +0.44% |