On Monday, driven by expectations of production cuts, $Brent Last Day Financial - main 2311(BZmain)$ surged to $88.90, while $WTI Crude Oil - main 2310(CLmain)$ reached their highest intraday level since November of last year.
In August, the International Energy Agency (IEA) had forecasted that this year's global demand would hit a historical high due to robust air travel, power generation needs, and activities in China's petroleum and chemical industry.
The reasons for the oil prices increase include:
Production Cuts: The OPEC+ alliance led by Saudi Arabia and Russia has implemented substantial measures to limit crude oil supply to support the market.
Supply Constraints: High temperatures and other weather-related issues have also affected the operations of refineries and factories. Furthermore, global oil inventories have decreased, reducing the risk of oil price declines.
Strong Crude Oil Demand: China's crude oil demand remains robust, partly driven by the recovery of its tourism industry and increased aviation fuel demand. Domestic flights in China have returned to pre-pandemic levels, and there is also strong demand for driving.
Investor Confidence: Portfolio investors have become less pessimistic about the outlook for U.S. crude oil prices, leading to an increase in net long positions for WTI crude oil. Bullish long positions are also on the rise, supporting the increase in oil prices.
Predictions by Other Institutions
Some major Wall Street banks predict that crude oil prices will continue to rise, with Brent crude oil possibly reaching $100 per barrel or higher.
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