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Higher prices for oil on the world market

Due to a recent development there was a rise in price for the West Texas Intermediate (WTI) and especially the North Sea Brent crude oil. The price of WTI oil is the highest since 5 December 2022, and the price of Brent is at its highest since 1 December 2022. Analysts attribute this oil price growth to two factors, namely the current drop in the exchange value of the US dollar (USD) and, in particular, the recovery of the economy in China which increased demand for oil products.

On 24 January 2023, at 9:24 am CET, the West Texas Intermediate traded on the New York Mercantile Exchange (NYMEX) commodity market at US$ 81.60 per barrel with a currently balanced movement of its price. For comparison, on 23 January the WTI crude oil traded at US$ 82.64 per barrel. However, the current price of WTI oil still represents an annual increase of +8.39%, but from the beginning of this year, according to technical analysis data, this price increase is only +1.29%. According to the financial strategists of the commodity market, this increase in the price of WTI oil fully corresponds to the trend and state of the world market. According to some, in just three weeks – from the beginning of 2023 – this increase in the price of WTI oil is more than average compared to all of 2022 combined the whole year’s price increase.

On 24 January 2023, at 9:44 am CET, the European counterpart of the American light crude oil WTI, the North Sea Brent crude oil traded on the Intercontinental Exchange Europe (ICE) commodity market at US$ 88.26 per barrel with a +0.08% daily gain so far. This price is approaching its recent high from the trading session during Monday, 23 January, when the daily high was US$ 89.09 per barrel. In the overall annual comparison, the current price represents an annual increase of +13.19% and according to technical analysis data there is a price increase of +2.69% from the beginning of 2023, i.e. in just three business weeks. According to analysts and financial strategists of the commodity market, the current growth in the prices of both WTI and Brent oil was influenced, among other things, by the drop in the exchange value of the American dollar.

On 24 December, at 10:07 am CET, according to the Dollar Currency Index (DXY) we saw the USD at a price level of 101.88 with a daily decrease of -0.25%. Oil prices in most of the world’s markets started the year higher as China showed signs of improvement and traders worried that sanctions against Russia could tighten supply. “While the (China) reopening itself will no doubt prove to be complicated, particularly over the holiday season, early indications suggest there has been a rise in activity, meaning the economy could perform better,” said OANDA analyst Craig Erlam. The coalition of the European Union and the Group of Seven (G7) will limit the prices of Russian refined products as early as 5 February 2023, in addition to the price ceiling for Russian oil in force since last December 2022 and the EU embargo on the import of Russian oil by sea. Mr. Erlam also added that Brent crude is expected to return to the range between $90 and $100 per barrel as the oil market tightens.

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