The price of oil rose yet again on Wednesday, consequently resulting in the commodity extending its longest streak of gains in the last two years. This price hike is the result of falling U.S. crude stockpiles which are contributing to the shortage of global supply.
The rise in the value of crude oil on Wednesday came after the American Petroleum Institute reported that inventories have fallen by 3.5 million barrels over the past week. According to official data, this drop is the eighth consecutive decline in the past nine weeks.
According to Jens Pedersen, a senior analyst at Danske Bank, “Oil prices continue to grind higher on the combination of tight supply, a weak dollar, and overall positive risk sentiment.” Not only has Saudi Arabia dramatically cut its supply, but regions such as China have experienced draining stockpiles of their own.
During its Short Term Energy Outlook on Tuesday, the Energy Information Administration announced that crude prices are expected to remain above $50 per barrel during the second half of this year. This news comes as United States explorers prepare to increase their drilling and production activities from the second half of 2021.
