Oil prices rose nearly 5% during the week ending Jan. 7 mainly due to supply concerns caused by ongoing protests in the OPEC member Kazakhstan and supply disruptions in Libya while the decision of major oil producers of OPEC+ instilled hopes for a stable market, contributing to further price upticks.
International benchmark Brent crude traded at $82.68 per barrel at 1229 GMT on Friday, posting a 4.91% gain from the Monday session that opened at $78.81 a barrel.
American benchmark West Texas Intermediate (WTI) registered at $80.23 per barrel at the same time on Friday, increasing 5.99% relative to the opening price of $75.69 a barrel on Monday.
Oil prices started the week on an optimistic upswing with Libya’s announcement on Saturday of production cuts that reached 729,000 barrels per day (bpd) due to upstream shutdowns and unexpected pipeline maintenance on the main crude oil pumping line connecting the fields of Samah and Dhahra to the Esidra port.
Another major development that positively contributed to the rising oil prices was the decision of the Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+. The group decided to extend the current plan to increase output by 400,000 barrels per day (bpd) through February.
Soon after the meeting, Brent oil price surpassed $80 a barrel as decisiveness of the group about their production policy restored investor trust about the market stability.
The political unrest in the OPEC member Kazakhstan, which emerged after the protests against a fuel price hike ended up with government’s resignation, increasing investors’ supply concerns.
Demonstrations that started in the oil-rich Mangystau region on Jan. 2 spread rapidly to other parts of the country, including the commercial hub and former capital Almaty, where thousands took to the streets.
Tokayev initially declared a state of emergency in Almaty and Mangystau from Jan. 5-19, before expanding it nationwide.
His Cabinet also resigned earlier this week, while the government has introduced price controls on liquified petroleum gas, gasoline, diesel and basic food products for 180 days.
-Unexpected rise in US gasoline stocks
Prices saw downward pressure after the US gasoline inventories increased by 10.1 million barrels during the week ending Dec. 31, posting the biggest one-week surge since April 2020.
Helping to cap further price declines, crude oil inventories fell by 2.1 million barrels to 417.9 million barrels, far below the market expectation of a 3.4 million-barrel drop.
By Sibel Morrow