Oil prices went up because people were optimistic about Chinese demand, producers cutting production, and Russia cutting supplies.
Brent crude increased 51 cents, or 0.64%, to $83.52 a barrel. Meanwhile, U.S. WTI crude for March delivery, which ends on Tuesday, was up 43 cents, or 0.63%, at $76.78. At the same time, the more active April contract was up 0.62% at $77.03.
Benchmarks fell $2 on Friday, down about 4.2% for the week after the US reported a rise in crude oil and gasoline inventories.
The OPEC+ group of producers, including OPEC, its allies and Russia, will cut oil manufacturing targets by 2,5M BPD until the end of 2023.
The West imposed a price ceiling on Russian oil and oil products. Hence, Russia plans to cut oil production by 500,000 BPD in March. This is 5.3% of its output.
India and China became the main users of Russian oil after the EU embargo.
Oil supply shortages this year will likely cause its price to increase to $100.
Prices will go up because there is a deficit in the market, due to shale constraints, underinvestment, and OPEC discipline that prevents supply from meeting demand.
Gas shortage exposes fragile
Just over a month before the Ramadan shopping season, the head of Pakistan’s retail industry is going between meetings and asking officials to stop making orders that close malls.
About 45% of retail sales happen on the 30th day of a holy month. The retail sector’s tension shows how a lack of imported gas hurts Pakistan’s power generation and economy, just as it has been slowed by inflation and a weak currency.
Both countries are trying to avoid last year’s massive power outages. But people in the industry and analysts agree: The crisis will get worse this year because there was a big drop in imports of liquefied natural gas.
Pakistan and Bangladesh have had to reduce LNG imports because of price increases from European demand to replace Russian supplies after the Ukraine war.
Pakistan’s gas-fired power generation went down 4.42% in 2022, even though output went up 1.82%.
Analysts and government officials said that electricity generation hasn’t met capacity and demand because of fuel shortages.
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