Oil prices increased due to a shortage and decreasing US inflation

14 Jul 2023 , 11:57 AM

Oil prices increased on Friday as a result of a tighter supply due to problems in Nigeria and Libya as well as a decrease in U.S. inflation, which markets believe may put an end to interest rate increases in the largest economy in the world.

Brent crude futures were up 27 cents, or 0.3%, to $81.63 per barrel. West Texas Intermediate futures for the United States increased by 35 cents, or 0.5%, to $77.24.

As inflation continued to decline, consumer prices in the United States increased slightly in June at the smallest annual increase rate in more than two years. The yearly growth in producer prices was the weakest in nearly three years, and it hardly increased in June.

Both signs provided the markets hope that the U.S. Federal Reserve might be nearing the conclusion of its most rapid campaign to tighten monetary policy since the 1980s.

A local tribe on Thursday shut down several oil fields in Libya in protest over the kidnapping of a former minister. Additionally, Shell has stopped loading crude oil from Nigeria’s Forcados terminal due to a possible leak.

This coincides with indications that Saudi Arabia’s and Russia’s recent production restrictions are having an impact, it continued.

The world’s two largest oil exporters, Saudi Arabia and Russia decided this month to extend the oil production curbs that have been in place since November of last year, helping to support crude prices even more.

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