ALBAWABA - Oil prices rose on Wednesday amid expectations that US oil production will remain largely stable until 2025, easing concerns of an oversupply.
Brent crude futures increased by 38 cents or 0.5% to $78.97 per barrel as of 0013 GMT, while West Texas Intermediate (WTI) crude climbed by 41 cents or 0.6% to $73.72. Both grades saw slight gains on Monday as well.
The US Energy Information Administration stated in its short-term energy outlook yesterday that domestic US production would not surpass the record set in December 2023, which exceeded 13.3 million barrels per day, until February 2025.
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Furthermore, the Energy Information Administration also reduced its projections for domestic oil production growth in 2024 by 120,000 barrels per day to 170,000 barrels per day. This is a substantial decrease from last year's production increase of 1.02 million barrels per day.
Government data on oil inventories is expected to be released later today, with US crude stockpiles anticipated to have risen by 1.9 million barrels in the previous week due to production recovery from a cold spell and refinery maintenance. Meanwhile, American, Qatari, and Egyptian brokers are preparing a diplomatic campaign to resolve the conflict between Israel and Hamas regarding a ceasefire in Gaza, following Hamas' response to the proposed ceasefire agreement in the region, which also includes the release of hostages.
Market participants are closely monitoring the situation in the Middle East, particularly the attacks carried out by Yemen's Houthi militia, which is aligned with Iran, on ships in the vital Red Sea, disrupting traffic through the Suez Canal. The Suez Canal is the fastest maritime route between Asia and Europe and handles nearly 12% of global trade.
