Global oil prices strongest run have gained more than 16% since late June. Moreover, it is heading for their fifth-straight week of gains. It is the longest rally since before Russia’s full-scale invasion of Ukraine upended energy markets.
The price of Brent crude, the global benchmark, ticked down 0.1% to $84 a barrel in Friday. However, it is still up 3.9% this week. The winning streak is the longest since an eight-week rally ended in early February 2022.
US oil prices are also set for a 3.9% gain this week. They have chalked up their longest rally since April 2022. That has spurred a jump in US gasoline prices, which hit an average of $3.73 a gallon on Friday, their highest level since mid-November 2022.
Fears of a global recession have swirled for months. Moreover a lackluster economic recovery in China had dampened prospects for energy demand. So why are oil prices climbing?
Oil output cuts
According to the International Energy Agency, global oil demand is expected to rise by 2.2 million barrels per day. It will be to a record 102 million this year. But global oil production is forecast to rise by only 1.5 million barrels per day to 101.5 million, the agency said in a report this month.
That supply gap has been exacerbated by production cuts by OPEC+, an alliance of the world’s major producers.
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Source: CNN
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