Oil Price Rise to $85.22 Per Barrel

On Wednesday 10^th November 2021, Oil price increased which lengthen the robust gain in the previous trading session, This was after industry data showed  stock of U.S crude fell unpredictably last week immediately after  COVID-19 pandemic restrictions eased.

 Brent crude futures were at $85.22 a barrel by 07:32 GMT, increasing by 0.5%, on Tuesday.

U.S. West Texas Intermediate (WTI) crude futures rose 0.2%, to $84.31 a barrel.

The WTI crude and Brent crude futures both reached their highest points in two weeks, Which was largely influenced by tightened global inventories in the past few months in the oil market. Concurrently current data from the American Petroleum Institute (API) shows supply still remains limited.

Data from the API reveals that U.S crude stock dropped by 2.5 million barrels, Which defied expectations of market analyst who estimated 2.1 million crude stock supply.

 Avtar Sandu, A senior commodity manager at Philip Futures stated “Supplies are tight with OPEC sticking to its guns,”  referring to the recent agreement between the Organization of Petroleum Exporting Countries and their allies to maintain an output growth of 400,000 barrels per day in December.

He further said “I still see a bull charging on; it might be taking a break now, but (if there’s) any small spark, it might just continue its march,”

The oil market eagerly await weekly inventory data which will be released by the U.S. Energy Information Administration (EIA) on Wednesday to see whether it confirms the drawdown in crude stocks.

Further underpinning the view the market remains tight, trading giant Vitol Group’s CEO Russell Hardy said on Tuesday that oil demand had returned to pre-pandemic levels and that the first quarter of 2022 could see demand exceed 2019 levels.

“The possibility of a spike to $100 per barrel is clearly there,” Hardy told the Reuters Commodities Summit.

Market gains on Tuesday were mainly driven by a short-term outlook from the EIA, which projected gasoline prices would fall over the next few months.

That was a key factor U.S. President Joe Biden had been watching to determine whether to release oil from the Strategic Petroleum Reserve amid concern over recent soaring gasoline prices.