Oil prices were up on Wednesday (Sep 15) after the American Petroleum Institute (API) reported a drawdown in crude oil inventories in the world’s largest oil consumer market.
Brent crude oil rose 39 cents, or 0.5%, to $73.99 a barrel by 0133 GMT, while U.S. West Texas Intermediate (WTI) crude climbed 44 cents, or 0.5%, to $70.90 a barrel.
Earlier this week, in a Bloomberg interview, analysts from Goldman and Bank of America Securities said that oil price will ”explode” and might even reach $100 sooner than expected.
One of the main factor that will contribute to high oil prices would be the weather. In most part of the Western world, winter is approaching and during this period, oil demand together with natural gas’ tends to skyrocket as it is used for heating and power generation.
Recent tropical storms in the United States is also an influential factor in the rise of oil prices. Hurricane Ida shut numerous refineries and offshore drilling production about two weeks ago and early this week the United States were hit with Tropical Storm Nicholas, drenching the states of Texas and Louisiana with torrential rain, flooding streets and leaving hundreds of thousands of homes and businesses without power.
It was reported on Tuesday (Sep 14) that Hurricane Ida has led to oil supply losses of 30 million barrels so far.
On Monday (Sep 13) OPEC stated that it sees stronger demand for its crude this year and next thus raising its 2022 demand forecast by a shocking 900,000 bpd.
Meanwhile, the International Energy Agency (IEA) said on Tuesday, vaccine rollouts are set to power a rebound in oil demand which was declining due to the spread of the Delta variant and lockdown restrictions around the world.
In the next six months, we are going to have a huge surge in vaccinations which will restart air travel and economies, so maybe a $100 dollar oil is more feasible next summer when people will start flying internationally again.