Oil prices rise as OPEC declares that the market’s fundamentals are sound

The U.S. crackdown on Russian oil shipments has caused supply disruptions, which has caused oil prices to slightly rise on Tuesday. This was attributed to an OPEC report that stated market fundamentals remained solid. Brent crude futures had increased by 33 cents, or 0.4%, to $82.85 a barrel. At $78.59 a barrel, U.S. WTI crude futures saw a 0.4% increase of 33 cents. Speculators were held accountable for the recent decline in prices by the Organization of the Petroleum Exporting Countries in their monthly report.

Furthermore, it maintained its relatively high 2024 prognosis while marginally raising its expectation for increase in the world’s oil demand in 2023. Concerns that demand may decline in the two largest oil consumers, China and the United States, caused oil prices to drop to their lowest point since July last week. October saw an unexpected decline in Chinese exports as well as a sharp drop in consumer prices to levels not seen since the COVID-19 pandemic.

In order to restore oil production from the oilfields in the Kurdish area and restore oil exports from the north via the Iraq-Turkey pipeline, Iraq’s oil minister anticipates reaching a deal with the Kurdistan Regional Government and international oil corporations. Following an arbitration decision by the International Chamber of Commerce, Turkey has stopped exporting 450,000 barrels per day (bpd) of oil from the north through the Iraq-Turkey pipeline as of March 25. A possible disruption in supply of oil was further bolstered by the U.S. assault on Russian oil shipments.

Washington’s largest move since imposing a price ceiling to limit oil earnings to Moscow comes from the U.S. Treasury Department, which has written notifications to ship management companies asking information about 100 boats it believes to be in violation of Western sanctions on Russian oil. After selling the most oil from the stockpile ever last year, the U.S. Energy Department has also purchased 1.2 million barrels of oil to aid in the restocking of the Strategic Petroleum Reserve.

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