Oil rises thanks to estimates of stable US production volume

Oil prices rose on Wednesday amid expectations that US oil production growth will remain largely stable until 2025, alleviating fears of excess supply.

According to Reuters, Brent crude futures rose 38 cents, or 0.5 percent, to $78.97 a barrel by 0013 GMT, while US West Texas Intermediate crude rose 41 cents, or 0.6 percent, to $73.72. Both crude oil prices rose slightly on Monday.

The US Energy Information Administration said on Tuesday in its short-term energy forecasts that US domestic production will not exceed the record recorded in December 2023, which is more than 13.3 million barrels per day, until February 2025.

The EIA also lowered its forecast for domestic oil production growth in 2024 by 120,000 bpd to 170,000 bpd, which is sharply lower than last year’s production increase of 1.02 million bpd.

US government data on oil inventory is scheduled to be released later on Wednesday. US crude inventories are expected to rise by 1.9 million barrels last week as production recovers from a cold spell and maintenance begins at refineries.

Meanwhile, American, Qatari and Egyptian mediators prepared a diplomatic campaign to overcome the differences between Israel and the Islamic Resistance Movement (Hamas) regarding a truce in Gaza after the Palestinian movement submitted its response to the proposed ceasefire agreement in the Strip, which would also include the release of hostages.

Traders are closely following the situation in the Middle East, especially the attacks launched by the Yemeni Houthi group allied with Iran on ships in the vital Red Sea, which have disrupted traffic through the Suez Canal, which is the fastest sea route between Asia and Europe and through which approximately 12% of global oil trade passes.