Saudi Arabia, the world’s largest oil producer, hiked prices by more than 50 percent, causing barrel oil prices to break another record.
Saudi Arabia’s increase in the price of crude oil sales in July from $4.40 to $6.50 a barrel led the price of Brent oil to hit $121.95 a barrel later on the day . After that, oil closed the day on the markets at $119.72.
At 09:23 today West Texas-style Crude (WTI) found buyers at $119.53 after seeing 120.99 a barrel.
Concerns about low supply
Concerns that production will not be sufficient to meet world oil needs are driving prices higher. The Organization of the Petroleum Exporting Countries (OPEC) and the OPEC+ group, which consists of some non-OPEC producer countries, announced last week that they will increase production by 648,000 barrels in July and August. Experts assume that the increase in production will not fill the gap created by the embargo on Russian oil.
On the other hand, according to weekly data from oilfield services company Baker Hughes, the number of rigs in the US remained at 574 for the week of May 28-June 3, unchanged from the previous week.
It states that technically the $120.63-$120.87 area in Brent Oil can be tracked as resistance and the $120.39-$120.15 area as support zone.
Citibank and Barclays on Monday raised their price forecasts for 2022 and 2023, saying they expect Russia’s production and exports to fall by around 1-1.5 million bpd by the end of 2022. Speaking to Reuters, some experts said Italy’s Eni and Spain’s Repsol could start shipping a small amount of Venezuelan oil to Europe from next month to fill the emerging gap.