The market is reassured by the fact that the possibility of an extension of the war in the Middle East seems to be receding
West Texas crude fell to $74 a barrel yesterday, below its 200-day average of around $78 a barrel.
The retreat of oil prices continues and accelerates, noisily denying, until now at least, the pessimistic estimates of their possible jump to 150 dollars a barrel due to the new war in the Middle East. A decisive factor is the increase in US strategic stockpiles, which reassures the market, as well as the fact that the possibility of an extension of the war seems to be receding.
Thus, the price of West Texas crude oil fell below $74 a barrel yesterday, as the decline in its price below its 200-day average, which is around $78 a barrel, has been accelerating in recent days. According to the latest data released by the US authorities, US oil inventories have increased and are now reaching the highest level recorded since August, with a significant increase recorded in reservoirs in Oklahoma.
The increase in the flow of “black” gold from Venezuela also contributed to the increase in production, after the embargo was eased by Washington. However, according to the estimates of market analysts, another factor contributed to the decline in the price, the increase in applications for unemployment benefits in the US, which last week reached the highest level in almost two years. The development is interpreted as a sign of slowing trends in the US economy, following successive increases in interest rates and therefore a possible decline in demand for oil.
Recently, oil prices have been constantly fluctuating due to conflicting messages, which reached last week week to drive its prices to three-month lows. At the beginning of the week, the International Energy Agency pointed out that there is an increase in production and the market's assessment that we are heading towards limited supply is wrong.
At the same time, however, OPEC expresses the assessment that an upward trend is being recorded demand, while market players discount that Saudi Arabia will further extend its production cut, which it has jointly agreed with Russia. And finally, the US president's energy adviser, Amos Hochstein, called on the US government to impose sanctions on more than 1 million barrels of oil a day that Iran exports. He even emphasized that the sanctions should remain in force for as long as the war in the Middle East continues.