Oil Prices Decline as U.S. Crude Production Increases
Prices of crude oil declined this week as the International Energy Agency report showed that U.S. production increased. The price of international benchmark Brent crude stood at $72.34 per barrel at Friday’s trading close, while American benchmark West Texas Intermediate (WTI) was at $68.47 a barrel.
Oil prices fell as expectations grew that the Israeli government’s approval of a cease-fire deal with Lebanon, designed to end more than 14 months of conflict with Hezbollah since the start of the Gaza war, could lead to further regional de-escalation.
Experts predicted that the cease-fire agreement that came into force on early Wednesday could pressure Israel to end its attack on Gaza.
The prospect of a lasting cease-fire in the wider region, home to a substantial share of the world’s oil reserves, has helped drive price declines by easing supply concerns among market participants.
EIA data showed that US crude oil production increased by 295,000 barrels per day (bpd) to about 13.9 million bpd during the week ending Nov. 22. The rise in the stocks of the world’s largest oil-consuming country put downward pressure on prices.
Moreover, US President-elect Donald Trump’s statement that he will increase tariffs led to fears that it could disrupt the Federal Reserve’s fight against inflation.
However, despite the high tariffs planned by the newly elected US President Donald Trump, news reports claim that China might prefer to negotiate instead of escalating tensions. This limited further price falls.
During the week, oilfield services company Baker Hughes data showed the oil rig count in the US decreased by 2 this week. The number of oil rigs, an indicator of short-term production in the country, fell to 477 for the week ending Nov. 29.
The number of US oil rigs fell by 28 compared to one year ago, according to Baker Hughes.#Oil Prices Decline as U.S. Crude Production Increases Naira Plunges on Suboptimal FX Intervention
