Crude Oil Prices Rise on Prospects of Tight Supply, Weak Dollar

TEMPO.CO, Jakarta - Crude oil futures posted solid gains in late trade on Wednesday, June 21, supported by the prospect of tight supplies, and the United States (US) dollar that fell amid comments by Fed Chair Jerome Powell in his testimony before Congress.

West Texas Intermediate (WTI) crude oil futures for August delivery lifted US$ 1.34 (1.88 percent) to settle at US$ 72.53 a barrel on the New York Mercantile Exchange.

Brent crude for August delivery added US$ 1.22 (1.61 percent) to close at US$ 77.12 a barrel on the London ICE Futures Exchange.

The prospect of tight corn and ethanol supplies in the United States means oil demand will increase as corn is used to produce ethanol, which is blended with fossil fuels.

The United States had only 55 percent of corn in good to excellent condition as of Sunday, June 18, down from 61 percent the previous week, reflecting the impact of drought, according to the US Department of Agriculture's weekly report issued on Tuesday, June 20.

Corn futures prices on the Chicago Board of Trade saw substantial growth on Wednesday, June 21, 2023, jumping 5.2 percent after a government report showed many US crops were stressed by drought conditions.

In addition, the European Union's 11th sanctions package against Russia is expected to further restrict Russian oil exports. If the new sanctions by EU members are implemented, oil supplies will be reduced by 250,000 barrels per day, according to Vladimir Zernov, analyst at market information supplier FX Empire.

ANTARA

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