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- Crude oil prices settled nearly 4% higher on Wednesday.
- The prices of both oil benchmarks are nearly 70% up over the last year.
- OPEC has reduced its 2022 crude oil demand forecast.
Crude oil prices jumped nearly 4% on Wednesday over worries related to tight supplies despite a substantial increase in US crude oil inventories due to releases from the nation's strategic reserves. As per the Energy Information Administration, the country’s crude stocks surged by more than 9 million barrels last week.
On Tuesday, the Organization of the Petroleum Exporting Countries (OPEC) squeezed its demand forecast for crude oil in 2022, citing the impacts of the Russia-Ukraine war and the resurgence of new coronavirus cases in China's Shanghai.
In its monthly report, the cartel stated that the world demand would rise by 3.67 million barrels per day in 2022, nearly 480,000 bpd lower than its previous forecast.
Crude oil prices have been trending up since 24 February 2022, the day Russia officially announced invasion of Ukraine. The chaos between both nations has persuaded the Western nations to ban Russian oil imports as a retaliative move over Ukraine’s invasion.
The oil embargo imposed on Russia's crude oil imports has curtailed global oil supplies and sent oil prices to 14-year highs in the last month.
Though the prices of both crude oil benchmarks took a breather after the members of the International Energy Agency (IEA) decided to release 240 million barrels from strategic petroleum reserves (SPR) in the coming six months, the prices are still 70% higher when compared to the corresponding prices last year.
Source: Refinitiv Eikon
On Thursday, June delivery, Brent Crude oil futures last traded at US$108.52 per barrel, down 0.23%, while May delivery WTI crude oil futures exchanged hands at US$103.69 per barrel, down 0.54% at 2:00 PM AEST.
Despite a huge chaos in the industry, the prices of both crude oil benchmarks are hovering at multi-year highs.
Various ASX-listed oil and gas players have capitalised on the ongoing crude oil rally.
Woodside Petroleum’s (ASX:WPL) share price has soared 29.59% in the last six months, trading 1.09% up at AU$32.39 per share on Thursday.
Another significant O&G player, Santos (ASX:STO), has also gained around 11.85% in the last six months. The STO share price climbed ~1.30% on Thursday, in line with the gains in crude oil prices.
Apart from this, various other small and mid-cap companies, including Karoon Energy (ASX:KAR), Melbana Energy (ASX:MAY) and Beach Energy (ASX:BPT) also logged significant gains in their share prices on Thursday.
OPEC has slashed its demand forecast for 2022, taking into account the impacts of the Russia-Ukraine war and the resurgence of fresh COVID-19 cases in China. The oil and gas players are witnessing gains as oil prices continue to rally amid increased global uncertainties and supply concerns.
Here’s how commodities performed in the last week; click here.
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