By Oil prices reached their highest levels since April on Thursday, driven by declining inventories and production cuts. This increase comes as demand surges during the summer season.
Price Action
- West Texas Intermediate crude for August delivery gained 13 cents, or 0.2%, to $75.89 per barrel on the New York Mercantile Exchange.
- September Brent crude gained 23 cents, or 0.3%, at $80.32 per barrel on ICE Futures Europe.
- August gasoline rose 0.2% to $2.67 a gallon, while August heating oil rose 0.1% to $2.6033 per gallon.
- August natural gas fell 0.2% to $2.59 per million British thermal units.
Market Drivers
Oil prices have seen an increase this week due to a smaller-than-expected rise in U.S. consumer prices and lower Treasury yields, which resulted in a significant decline in the U.S. dollar’s value. This currency depreciation has supported the prices of commodities that are priced in dollars.
The value of the U.S. dollar relative to a basket of currencies hit a more than one-year low on Thursday, with the ICE U.S. Dollar Index falling 0.3% to 100.91.
Despite the Energy Information Administration reporting a weekly gain in U.S. commercial crude inventories of 5.9 million barrels on Wednesday, OPEC+ supply cuts and decreased Russian exports have also played a role in supporting global oil prices. UBS Group recommends investors take a long position on oil prices due to these factors.
“With less supply from OPEC+ during the demand-heavy summer months, we expect larger oil inventory declines to become visible and support oil prices,” said Giovanni Staunovo, a commodity analyst at a Swiss bank.
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