Oil prices continue to rise, thanks to robust demand forecasts

Oil drilling rigs

Oil prices continued to rise today, July 28, supported by expectations of a rise in demand for crude oil, amid a decline in supply, after data showed yesterday that US oil inventories fell to their lowest levels since May-end.

Brent crude futures for September delivery rose 1.02%, or about $1.09, to $107.71 a barrel at 09:12 AM Makkah time. US crude futures for September delivery also surged 1.31%, or $1.28, to $98.54 a barrel.

The latest data from the US Energy Information Administration (EIA) showed that the weekly demand for gasoline increased 8.5% in the week ended July 22, thanks to lowered prices for the 43rd consecutive day, recording the largest weekly decline since 2008.

The US dollar fell near its lowest level since July 5, which contributed to boosting oil demand, as Federal Reserve Chairman Jerome Powell confirmed that the central bank will begin to slow the pace of interest rate hikes at some point, following the latest 75-basis-points increase.

Prices were also supported by discussions on a Russian oil price cap, with the G7 aiming to put in place a price-setting mechanism on Russian oil exports by Dec. 5.