Oil gained value in July, following concerns over violent unrest in Egypt, a rise in Asian crude demand and tighter supply, National Australia Bank (NAB) reports.
The NAB market update noted that a step-up in the military threat level between the US and Syria also had an impact more recently.
NAB evaluated three oil price benchmarks: Brent, the West Texas Intermediate (WTI) and Tapis.
All three experienced increases in July when compared with June, with the WTI ending up nine per cent at US$105 per barrel (bbl).
This put the benchmark 19 per cent higher than in the same period last year, which NAB said had “upset most market forecasts” as many had predicted US$100 to be the upper limit.
The Brent-WTI differential now stands at just US$3/bbl – the lowest it has been since January 2011, although the bank claimed the spread will widen in the near future as supply improves.
According to NAB, this is because of an expanded takeaway capacity from WTI trading hub Cushing, as well as high refinery crude runs driving down inventory levels at record rates in July.
People considering oil and gas training courses may be encouraged to hear that future estimates look promising, with NAB highlighting several positive factors.
The bank said: “We remain relatively optimistic about the outlook for oil prices.
“The impact of stronger global demand on prices is expected to outweigh the effect of improving supply-side factors over 2013, even when taking into consideration the likelihood of tightened supply from the Middle East.”
NAB said these Middle East disruptions will continue to have a buoyant effect on prices in the short term, although increased supply from nations outside the Organisation of the Petroleum Exporting Countries (OPEC) will lead to a cap on values.