ISLAMABAD
Oil futures logged their seventh weekly gain in a row — the longest such streak since 2022 — powered by record global demand outlook and supply concerns in the coming months.
Both major global benchmarks Brent and West Texas Intermediate (WTI) ended the week higher by 0.66 percent and 0.45 percent, respectively. Brent, the international benchmark for two-thirds of the world’s oil, rose to $86.81 from $86.24 a barrel, showing a gain of $0.57 on a week-on-week (WoW) basis. The WTI, the main oil benchmark for North America, edged up to $83.19 from $82.82 a barrel on a weekly basis, registering a weekly gain of $0.37.
Similarly, the price of Russian Sokol surged by $2.47 (+3.12 percent) to $81.74 from $79.27 on WoW basis. Following suit, Arab Light prices witnessed an increase of $2.96 (+3.34 percent) to reach $91.51 from $88.55 a barrel on a weekly basis. Similarly, the price for Opec Basket increased to $89.75 from $86.66 on a week-on-week basis, showing a gain of $3.09 (+3.57 percent).
Oil prices edged higher after the International Energy Agency forecast record global demand and tightening supplies. The last time that Brent rose for seven straight weeks was in January-February 2022. The IEA estimated that global oil demand hit a record 103 million barrels per day in June and could scale another peak this month.
Meanwhile, output cuts from Saudi Arabia and Russia set the stage for a sharp decline in inventories over the rest of 2023, which IEA said could drive oil prices even higher. Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) said it expects global oil demand to rise by 2.44 million bpd this year, unchanged from its previous forecast, while prospects for the oil market look healthy for the second half of the year. US economic data last week also lifted market sentiment, fueling speculation that the Federal Reserve would end its aggressive rate hikes.
Keeping this oil price rally in view, Pakistan may raise petroleum prices by Rs14 to Rs24 per litre for the second fortnight (August 16-31) of the current month, local media reported.
As the international oil prices kept rising during the last 15 days, the government may raise rates by Rs14 per litre petrol and Rs24 per litre high speed diesel (HSD). The government has already hiked petrol and HSD prices by nearly Rs20 with effect from August 1, 2023. The International Monetary Fund (IMF) loan conditions forced the government to pass on rising international commodity prices to local consumers.
Over the past two weeks, refined product prices have risen by $13 per barrel to $111 per barrel, and petrol prices have climbed by $7 per barrel to $97 per barrel. The government is charging Rs 55 petroleum levy on petrol and Rs 50 per litre on HSD. Potential price rise may affect August inflation.
