Crude oil prices witnessed a difference at the end of the day, Wednesday, April 5 (2023); US crude fell after 4 sessions of gains, pressured by fears of an economic recession that might limit demand, while Brent crude rose near $85 a barrel.
Crude prices rose, supported by lower US oil inventories and OPEC’s announcement of voluntary production cuts.
The OPEC+ pledges raised the total size of the alliance’s cuts to 3.66 million barrels per day, including a cut of two million barrels in October, equivalent to about 3.7% of global demand.
Crude oil prices today
At the end of the session, Brent crude futures for June 2023 delivery rose 0.06%, to record $84.99 a barrel.
While futures contracts for West Texas Intermediate crude – delivery in May 2023 – fell by 0.1%, recording $ 80.61 a barrel, according to what was seen by the specialized energy platform.
And crude oil prices ended their dealings, yesterday, Tuesday, April 4, on the rise, to continue to reap gains for the fourth consecutive session, supported by OPEC + moves aimed at stabilizing the markets.
Oil market analysis
Weak manufacturing activity in the United States and China – the two largest oil consumers – limited gains in crude oil prices.
“The present raises concerns about a healthy economic expansion, with manufacturing activity slowing in China, the eurozone and the United States last month,” said Tamas Varga, analyst at PVM Oil Brokerage.
He added that record flows of Russian diesel into the Middle East in March and the sluggish performance of middle distillate contracts “served as a brake on any attempt to drive crude oil prices significantly higher”.
In Asia, data showed that Japan’s services sector grew in March at the fastest rate in more than 9 years.
However, weak manufacturing activity in the United States and China – the two largest oil consuming countries – has prevented crude oil prices from rising further, despite the possibility of supply tightening after the OPEC+ cuts.
Traders will look for clues about broader economic trends from the US non-farm payrolls data, due later this week, analysts say.
“The US non-farm payrolls are likely to be the most influential economic data leading to broad market movements,” said CMC Markets analyst Tina Ting, according to Reuters.
oil stocks
Crude oil prices received a boost after US crude inventories fell by 3.7 million barrels in the week ending March 31, to 470 million barrels.
Inventories of gasoline and distillates in the United States also fell by 4.1 and 3.6 million barrels, respectively.
The continued addition of support was the latest supply-cutting targets set by the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, a group known as the OPEC+ alliance.
“Energy traders are still digesting the sudden production cut in OPEC + and any news indicating that the oil market will remain tighter will lead to higher prices,” said OANDA analyst Edward Moya.
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