While oil prices are on the rise due to an increase in air travel in China as that nation reopens from its recent COVID-19 lockdowns, unseasonably warmer weather in the United States and Europe has led to a drop in the price of natural gas, Forbes reported.
Crude oil prices rose 9% this week alone, wiping out losses since Jan. 2 by ending trading with the international Brent barrel price closing Friday at $85.28.
The increase, the report said, is largely due to China reopening after locking down from COVID-19 infections, causing a strong rebound in air travel demand there.
The oil pricing is in line with the U.S. Energy Information Administration’s Short-Term Energy Outlook, which has that index with an average price of $83 per barrel through 2023, a drop of 18% from 2022 levels.
“Ongoing concerns about global economic conditions as well as the easing COVID-19 restrictions in China, however, increase the uncertainty of the outcomes of our demand forecasts,” the agency said in a report. “With more global oil production than consumption in our forecast, we expect global oil inventories will increase over the next two years.”
Reuters reported that Exxon is completing the $1.2 billion expansion of a Beaumont, Texas, refinery that will sharply increase gasoline and diesel production, raising the facility’s crude oil production by 250,000 barrels per day.
“Construction of the new crude unit is completed. We have initiated startup procedures and commissioning is underway,” Exxon spokesperson Chevalier Gray said in an emailed statement to the news outlet. “The unit will add 250,000 barrels per day of all new supply for the refined products market.”
The increase would make the refinery the second largest in the nation and mark the first major production expansion in almost a decade, the report said.
As the future of oil looks bullish, warmer than expected winter weather in the United States and Europe is causing natural gas prices to fall.
That commodity started the year at $4 per million British thermal units [Btu] due to unseasonably warm temperatures, but is expected to average out at $5 per million Btu as colder temperatures arrive, according to the EIA report.
© 2023 Newsmax. All rights reserved.