Analysts fear that there is no end in sight to the rise in oil prices

Despite a broader market sell-off on Monday, oil prices managed a small gain on growing belief that even a recession would not ease supply constraints.

On Monday the Nnorthern sea‘s Brent, Forties and Ekofisk were all bid at higher levels than Friday; West Texas Intermediate Rose 26 cents to settle down $120.93 per barrel and Brent increased for August settlement 26 cents to settle down $122.27 per barrel.

Brent’s next futures contract more than traded $3 over the next month, suggesting that crude oils, which underpin the global benchmark, are extremely tight.

Daniel Yeginvice chairman at S&P Global Inc. told Bloomberg TV that “supply is razor thin” and appears tighter than in other recessionary periods.

Pavel MolkhanovAnalyst at Raymond James & Associates Inc., added: “Even in the face of US economic slowdown, tight crude oil market fundamentals remain in place.”

And in a good/bad news scenario (good for energy producers, bad for consumers), many traders and analysts see oil demand growing into 2023 and supply struggling to keep up; some fear Brent will reach soon $150 per barrel and others predict it will go even higher $175-$180 by the end of this year, driven by post-pandemic demand and Europe‘s sanctions against Russia.

Added to this is the high inflation: the energy information management In its latest monthly report, it trimmed its forecast for US oil production 11.9 million barrels per day (bpd) in 2022 compared to a previous estimate of 12.01 milliondue to rising costs that force companies to revise annual spending plans just to meet production targets.

The EIA also lowered its forecast for 2023 12.85 million bpd of oil production.

It is not helping nervous traders at the moment that a political crisis has caused further closures of ports and fields in Germany Libyawhich usually produces about 1.2 million bpd annually and is now reportedly pumping a paltry amount 100,000 bpd.

Mohammed OunOil minister for Libya said Monday that “almost all oil and gas activities in eastern Libya will be halted” and the risk of further political unrest remains elevated.

US gasoline prices are also sure to cause further turmoil in the coming trading sessions as they rose for the first time in American history on Monday $5 national.

However, Patrick DeHanHead of Petroleum Analysis GasBuddyFrom the top prices “I don’t think we’re far away,” he told the media: “I don’t think it would be overshadowed $5.50…. I would say $5.25 is the best, but here too the market has gone haywire.”

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