WTI price holds $76 position around due to rising fears of Oil supply
WTI prices tend to rise due to increased supply concerns in the Middle East.
Libya’s oil exports have been blocked at multiple ports due to a deadlock between different political factions.
Iraq intends to lower its oil output to between 3.85 million and 3.9 million barrels per day starting next month.
The West Texas Intermediate (WTI) oil price continued to surge, reaching $75.50 per barrel during Friday’s Asian session. Concerns over Middle Eastern supply are driving this growth. Worries over diminished Libyan oil supplies, as well as Iraq’s plans to curtail production, are adding to supply concerns, which are driving up oil prices.
On Thursday, more than half of Libya’s oil production, around 700,000 barrels per day (bpd), was shut down, and exports were halted at numerous ports owing to a standoff between competing political factions. According to Rapidan Energy Group, as reported by Reuters, Libya’s production losses might reach 900,000-1 million bpd and last for many weeks.
Furthermore, Iraqi oil supplies are expected to fall as the country has exceeded the quota set by the Organization of Petroleum Exporting Countries (OPEC) and its allies. According to a source with direct information, Iraq aims to reduce its oil output to between 3.85 million and 3.9 million barrels per day (bpd) beginning next month, Reuters reported on Thursday.
Nonetheless, the increase in WTI prices may be restricted by weaker global demand for crude oil. Persistent fears about China’s economy, the world’s top oil importer, continue to depress oil consumption. On the other hand, the US economy has expanded modestly, which has boosted investor confidence. In the second quarter, the US Gross Domestic Product (GDP) increased at an annualized rate of 3.0%, above both the expected and prior growth rate of 2.8%.
WTI prices may be supported by the Federal Reserve’s rising likelihood of cutting interest rates beginning in September. On Thursday, Federal Reserve Atlanta President Raphael Bostic, renowned for his hawkish position on the Federal Open Market Committee (FOMC), said it might be “time to move” on rate cuts. This is in response to continued dropping inflation and a higher-than-expected jobless rate.
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