Oil Prices Rise on Expectations of Stable Production
Updated: 2024-02-07T04:37:34+00:00
Oil prices climbed on Wednesday, supported by expectations that US oil production growth will remain relatively stable until 2025, easing concerns about oversupply.
Brent crude futures rose 38 cents, or 0.5 percent, to $78.97 a barrel by 0013 GMT, while U.S. West Texas Intermediate crude gained 41 cents, or 0.6 percent, to $73.72. Both benchmarks were slightly higher than on Monday.
The U.S. Energy Information Administration (EIA) reported on Tuesday that U.S. domestic production will not exceed the December 2023 record of over 13.3 million barrels per day until February 2025. The EIA also slightly lowered its forecast for domestic oil production growth in 2024, to 170,000 barrels per day, down from last year’s production increase of 1.02 million barrels per day.
Market participants are closely monitoring developments in the Middle East, particularly recent attacks by Yemen’s Iran-aligned Houthi group on ships in the Red Sea, which have disrupted traffic through the Suez Canal, a key shipping route for approximately 12 percent of global oil trade.