THE NAGA GROUP AG The price of Brent (#OIL_K2) crude futures in July 2022 continue to rise despite the lack of agreement in Europe on the embargo of commodities from Russia. This happens against the background of data on the reduction of oil reserves and the continuation of the energy crisis in the world.
What is the reason for the rise in Brent and WTI?
Brent crude futures for July settlement gained 47 cents, or 0.41%, to $114,50 on May 26. At the same time, U.S. West Texas Intermediate (WTI) crude futures for July delivery climbed 53 cents, or 0.48%, to $110,86 a barrel.
On May 25, it became known about the continuing deficit of crude oil reserves in the USA. All this is complemented by the growth of commodities exports to countries that are forced to refuse Russian oil.
So far, the European Union has not agreed on a complete embargo on Russian energy imports. However, if the politicians succeed in reaching an agreement with Hungary, the oil deficit on the European market will increase. This will create conditions for even greater export of commodities from the USA. Accordingly, prices for Brent and WTI futures for July already exceed their current market value by almost $10.
Other factors are favoring further upside in oil prices.
"Shanghai is preparing to reopen after a two-month lockdown, while the U.S. peak driving season begins with the Memorial Day weekend, which could provide a fillip to oil demand," said Sugandha Sachdeva, vice president of commodities research at Religare Broking.
How long will the growth of energy resources last?
"The focus in oil markets is on the EU summit taking place next week, at which another attempt will be made to agree on an EU-wide embargo on Russian oil," said Stephen Innes, managing partner at SPI Asset Management.
So we need to be prepared for increasingly expensive energy resources. Unfortunately, this trend will likely continue until the spring of 2023. ❗
After all, even with the production growth, it will be difficult to meet the demand for some time. However, you can always use this market situation to your advantage by trading oil futures with NAGA.
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NAGA Group AG published this content on 26 May 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 June 2022 13:01:01 UTC.
