Crude oil prices rose slightly, during today’s trading, Thursday, April 27 (2023), in an attempt to reduce the huge losses incurred during the previous two sessions.
The major decline in the oil markets was driven by fears of a US recession and an increase in Russian oil exports. This reduced the impact of OPEC+ production cuts.
Crude oil prices received some support from the decline in US crude stocks more than expected, and the imminent entry into force of cuts by OPEC + countries, starting from the beginning of May. This raises the total reduction of the coalition to 3.6 million barrels per day until the end of this year.
Crude oil prices today
By 08:28 a.m. GMT (11:28 a.m. Mecca), Brent crude futures for June 2023 delivery rose 0.37%, to $77.98 a barrel.
West Texas Intermediate crude futures – for June 2023 delivery – increased by 0.17%, recording $ 74.43 a barrel, according to what was seen by the specialized energy platform.
Crude oil prices ended their trading, yesterday, Wednesday, April 26, down by about 4%, continuing to bleed losses, with concerns about demand.
Oil price analysis
Recession fears overshadowed a larger-than-expected decline in US crude inventories, as crude oil prices fell by 4% during Wednesday’s trading, extending their sharp losses from the previous session.
As of Wednesday’s close, Brent crude fell 4.9% this week, while WTI lost 4.6%.
OANDA analyst Edward Moya said that crude oil prices are still heavy after dropping below $80; The destruction of excessive demand weighed on the US economic outlook, adding that OPEC was right to cut production earlier this month.
Moya added: “Oil is trying to find a floor and the only thing that can provide some support is technical buying,” according to Reuters news agency.
demand for oil
New orders for major capital goods manufactured in the US fell more than expected in March and shipments fell; This indicates that lower business spending on equipment slowed economic growth in the first quarter.
OPEC’s share of India’s oil imports fell at the fastest pace in 2022/23 to its lowest levels in at least 22 years as its consumption of cheaper Russian oil rose, while China also ramped up purchases of Russia’s Urals.
The loading of oil from Russia’s western ports in April will be the highest since 2019, above 2.4 million barrels per day, despite Moscow’s pledge to cut production.
Oil price forecast
Energy and Middle East expert Cyril Woodershoven attributes the recent decline in crude oil prices to the fact that the market is still not subject to supply and demand, but rather to turmoil. Whether in China, Iran or banks.
He points out that the overall impact of these disruptions is very low at the moment, so pessimism about them may result in a deterioration in the market, explaining that expectations and speculation are driving prices and futures down.
The expert in energy and the Middle East expects that there may be a price reaction when the decision to cut production enters into force next May, but it will be very weak.
He stressed that at the present time, the focus is on the economy, political turmoil, and the continuous rush in the United States and Europe towards energy transition issues, and the market seems to be constrained by fears, which he believes are unrealistic.
The advisor and expert in the field of energy in the Sultanate of Oman, former Director General of Marketing at the Omani Ministry of Energy and Minerals, Ali bin Abdullah Al Riyami, expected prices to hover around 80 to 85 dollars before the end of this year.
He said, in exclusive statements to the specialized energy platform: “The markets will not witness a significant decline to levels below $ 75, and yet he did not rule out that this would happen, but the justifications – currently – are not strong for a drop in prices below $ 75, and there are no justifications for the price hike.” to over $85.
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