The West Texas Intermediate (WTI) oil price benchmark closed above US$80 per barrel on each of the last three trading days of July, the highest level since last April.

The benchmark had been closing below $80 (and sometimes below $70) since April 19.

While WTI started the month in the low $70s, the strong finish yielded an average price of $76 in July or about 8% higher than in June. On a year-to-date basis, it is right around $75.

The tug-of-war between the dampening effects of higher interest rates and tight oil supply has shifted in favour of the latter with traders more focused on falling inventories than signs of a global economic slowdown.

According to the International Energy Agency’s July Oil Market Report, global oil demand in 2023 will reach a record high of 102.1 million barrels per day (mb/d) in 2023 with production coming in short of this at 101.5 mb/d.

Future oil prices will depend on, among other things, the strength of the Chinese economic recovery (China is the world’s largest importer of oil), the resolve of OPEC to maintain supply cuts, the war in Ukraine, and the lagged effects of higher interest rates on economic growth.

Our current forecast is for WTI to average $76 per barrel this year and $74 per barrel in 2024. We will be publishing a revised price forecast in September.

Answer to the previous trivia question: As of December 2022, there were 11,354 food services and drinking places (i.e. restaurants, bars, and caterers) in Alberta.

Today’s trivia question: In what year did the Alberta government declare the first Monday of August to be Heritage Day?