Moody’s raises average oil price outlook to $ 50- $ 70

NEW YORK: Oil prices fell nearly 2% on Wednesday after hitting multi-year highs as an unexpected increase in US crude inventories prompted buyers to pause after recent searing gains.

The latest surge in crude prices was underpinned by the refusal of the Organization of the Petroleum Exporting Countries and its allies to increase production and concerns about limited energy supplies globally.

On Monday, OPEC, Russia and other allies, known as OPEC +, chose to maintain a plan to gradually increase production and not increase it further, such as the United States and other consuming countries have done so.
been urged.

“An energy crisis is unfolding as winter in the northern hemisphere has yet to begin and paves the way for even higher oil prices,” said Stephen Brennock of oil broker PVM.

Brent crude hit $ 83.47 a barrel, its highest level since October 2018, but at 12:53 p.m. ET (1653 GMT) was down $ 1.62, or 2%, to $ 80.94.

U.S. crude climbed to $ 79.78, its highest level since November 2014, before falling to $ 77.42 with a loss of $ 1.51 or 1.9% on the day.

US crude inventories rose 2.3 million barrels last week, compared to a modest drop of 418,000 barrels, according to the US Department of Energy.

Notably, US production rose to 11.3 million barrels per day, recovering from storm-related shutdowns more than a month ago to rebound near pandemic highs but still far from the record of 13 million bpd set in 2019.

With shale companies forcing drilling to focus on investor returns, US production has been unable to offset OPEC’s efforts to restrict exports.

“We have largely recovered from Hurricane Ida in crude production. As OPEC + remains diligent in the way it manages the oil market, which could leave the door open for US crude producers, ”said Tony Headrick, energy market analyst at CHS Hedging.

The price of the global benchmark Brent has jumped more than 50% this year, adding to inflationary pressure that could slow the recovery from the COVID-19 pandemic. Natural gas has reached a record high in Europe, and coal prices from major exporters have also reached all-time highs.

Jeffrey Halley, analyst at brokerage firm OANDA, said the two crude contracts appeared to be overbought based on a widely followed technical indicator, the Relative Strength Index.

“It may signal daily pullbacks this week but does not change the underlying bullish case for oil,” he said.

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