Oil prices rallied for the fourth consecutive week on Tuesday due to mounting concerns about supply shortages. The decline in U.S. shale oil production, coupled with production cuts by Saudi Arabia and Russia, has heightened worries about the availability of oil in the market.
U.S. West Texas Intermediate crude futures rose by 1% to $92.38 a barrel, inching closer to a 10-month high. Similarly, the global benchmark, Brent crude futures, increased by 0.3% to $94.70 per barrel.
Shale Oil Production Drops and Major Producers Limit Supply
Over the past three weeks, oil prices have maintained an upward trajectory. Major shale-producing areas in the U.S. are expected to witness a decline in oil output, reaching the lowest levels since May 2023.
Saudi Arabia and Russia recently extended their combined supply cuts of 1.3 million barrels per day until the end of the year.
Saudi Arabia’s Energy Minister emphasized the importance of carefully regulating international energy markets to manage fluctuations, expressing concerns about uncertainties related to Chinese demand, European growth, and central bank actions addressing inflation.