Oil closes higher as investors study supply-demand outlook

Oil drilling rigs

Oil closed higher today, May 22, as investors assessed supply-demand prospects.

Brent futures for July delivery rose 0.5%, or 41 cents, to settle at $75.99 a barrel, after fluctuating between $74.55 and $76.46.

West Texas Intermediate (WTI) crude for June delivery rose 0.6%, or 44 cents, to settle at $71.99 per barrel.

JP Morgan analysts said that total exports of crude oil and oil products from OPEC+ fell by about 1.7 million barrels per day by May 16, adding that Russian oil exports will likely decline by late May.

The International Energy Agency (IEA), in its monthly report, said that demand would exceed supply by about 2 million barrels per day during the current year.

Limiting oil's gains during the day, the dollar rose after statements by Federal Reserve officials in light of the markets' anticipation of the resumption of US debt ceiling negotiations. The expected date for the government's to meet its obligations is in early June.

IEA Executive Director Fatih Birol warned of the possible default by the US in the payment of its debt, pointing out that this may lead to a decrease in demand for oil and a decline in prices, but he made it clear that such a scenario is unlikely.

Haitham Al-Ghais, Secretary General of OPEC, stressed the need for the world to focus on reducing harmful greenhouse gas emissions rather than replacing one form of energy with another, noting that the lack of investment in the oil and gas sectors may cause market volatility in the long term. It puts growth at risk.

Meanwhile, the Group of Seven major industrialized countries pledged in their annual meeting of leaders to strengthen efforts to confront Russia's evasion of setting a ceiling for the prices of its exports of oil and fuel.