Oil rose on Monday amid fears of a reduction in production in the United States, the world's largest producer, after damage from Hurricane Ida.
The quotes exceeded the key resistance level of $70 per barrel and reached the level of 70.15. In general, analysts expect stability in the oil market in the coming months. The US Energy Information Administration said in a report last week that Brent crude oil prices will remain close to current levels until the end of 2021, averaging $71 per barrel in the fourth quarter. The market needs more understanding about the economic impact of the coronavirus in the long term, and for now, most assets, including oil, can continue to trade in a sideways range. Prices are still finding some support from the impact of Hurricane Ida on production in the United States. About three-quarters of offshore oil production in the Gulf of Mexico, or about 1.4 million barrels per day, has been suspended since the end of August. Nevertheless, the number of drilling rigs in operation in the United States has increased over the past week, and production may increase in the coming weeks. In addition to the impact of the hurricane, the market's attention this week will be focused on a possible revision of the forecast of oil demand from OPEC and the International Energy Agency, as the number of cases of coronavirus infection continues to grow. On Monday, OPEC is likely to revise its forecast for 2022 down. Supplies may increase due to China's plans to sell oil from its strategic reserves. China said on Monday that it would announce details of planned sales of crude oil from strategic reserves in due course.
The forecast expects a further increase in the price of WTI oil to the levels of 70.3, 70.5 and 71 dollars per barrel.