Yesterday (28/05), oil prices rise 0.62%, to close at $ 57.94/barrel, due to U.S. crude stocks fell for 4 consecutive weeks to 2.8 million barrels.
Consumer demand for energy of the US has soared in summer. Even the US imported more oil from Saudi, up to over 1 million barrels per day (pbd).
Today, oil prices rose in Asia and Europe session, currently traded at $58.43/barrel at 4:41 pm GMT+7.
Oil price is likely to increase due to the following reasons:
- Two Canadian oil companies closed sand mines due to forest fires occurred nearby while two companies produce about 230,000 bpd, accounting for 10% of total production in the region.
- Oil demand rose sharply during the summer: special in the US, OPEC countries (Saudi Arabia, Iran etc.). The airline BMI said, OPEC members must reduce oil exported to overseas market because new oil production domestic demand is rising in this time of year. Moreover, the Saudi Arabia is promoting the development of a new oil refinery, so they will need more crude oil.
- China’s oil demand is expected to increase because of new policy which encourage oil storage. They also need more oil for their new refineries.
- Experts said that the U.S. economy in the first quarter is losing momentum. Weaker dollar my support oil price.
However, oil price may decline because of the following reasons:
- OPEC is expected to maintain their output, which will worsen surplus and put downward pressure on oil price until 5th June meeting.
Forecasting: Oil price can go up to $58.92.