Oil prices rise again: investors are active in the buying trend

 

Rising oil prices

Crude oil prices continue to rise despite the anticipated collective release of SPRs, strategic petroleum reserves, by the leading economies.

As of 09:30 on Friday, the price of WTI and Brent stood at $80.06 and $82.60 respectively.

Although the OPEC+ estimated an oil glut in the first quarter of 2022 last year, something they revised later on, the indications are the demand is fast reaching the pre-pandemic level.

Data from the API, industry-funded American Petroleum Institute, and the EIA, US Energy Information Administration, clearly indicates that the US crude oil inventories are falling and the trend has been consistent for the last few weeks.

EIA - US crude oil data - December 2022


With the talks over reviving the JCPOA, 2015 Iranian nuclear deal, keeping up the momentum just to avoid going passive, the prospect of crude oil markets flooded by Iranian oil remains a distant dream as far as far as beleaguered global importers are concerned.

The optimism of Iranian oil producers has not met the political will in order to complement it, despite the severe need of petro-dollars to revive many vital sectors of the Iranian economy.

The resistance against coming to an agreement with Iran over the nuclear issue without getting a guarantee for not producing weapons, meanwhile, is growing by day: it’s not just Israel, Iran’s arch enemy in the region, that is against such a move; the major Sunni Arab nations want the same in spite of recent manoeuvres to ‘repair’ strained ties.

With the price of crude oil going past the politically-sensitive $80, the pressure on the Western politicians is reaching the peak – once again; the colder winter days ahead do not help the situation either, especially in the presence of rising gas prices, exacerbated due to the conflict with Russia.

In this context, all eyes are on the US administration to gauge the next move, individual or collective, in order to curb the rising energy prices.

The US oil rig count, meanwhile, remains steady, bringing about a ray of hope for the US local audience. Its immediate impact on the price at the pumpls may not be visible in the short run, though, dashing the hopes of the politicians.

US Oil rig count - December 2021

With a firm commitment to cutting down on greenhouse gases, it has very little room for manoeuvre in the uphill task, though.

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