April 13, 2024

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Oil prices continue to rise with bullish sentiment taking over

Oil prices continue to rise with bullish sentiment taking over

Crude oil prices maintained their gains from last week and continued their rise in mid-morning trading in Asia today amid continuing concerns about supply.

Last week, the IEA report led to a 4% increase in benchmarks, with Brent crude above $85 a barrel and WTI rising above $81. The International Energy Agency said in its report that the oil market this year will move towards a deficit, which is a radical modification of its position from last month when it said that the market will face an oversupply.

Meanwhile, the International Energy Agency revised its oil demand forecast upward, expecting growth to exceed 1.3 million barrels per day this year, up from 1.2 million barrels per day in last month's report.

Another cause for concern about supplies is a series of Ukrainian drone attacks on Russian refineries that have affected fuel production at the world's largest exporter.

“The strikes on Russian refineries added $2 to $3 per barrel to the risk premium for crude last week, which remains in place as we start this week with more attacks over the weekend,” said Vandana Hari of Vanda Insights. Tell Bloomberg.

Reuters has estimated The attacks caused the disruption of 7% of Russia's refining capacity during the first quarter of the year.

Meanwhile, the prospects for peace between Israel and Hamas became more remote, after Israeli Prime Minister Benjamin Netanyahu said he would go ahead with the planned attack on Rafah despite advice to the contrary from Israel's allies.

Moving forward, this week traders will be watching the Fed's two-day meeting starting tomorrow, although there are no actual expectations for a rate cut, and most expect the central bank to keep interest rates unchanged.

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Meanwhile, CERAWeek begins in Houston, where several oil major CEOs are scheduled to speak during its first day, including TotalEnergies' Patrick Pouyanne, Aramco's Amin Nasser, and Exxon's Darren Woods.

Written by Irina Slav for Oilprice.com

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