Crude oil prices rose more than 1% during trading today, Friday, May 5 (2023), but they are preparing to record weekly losses for the third time in a row.
This comes after the markets witnessed a significant drop amid fears of a weak US economy and slowing Chinese demand.
Crude oil prices today
By 06:51 a.m. GMT (09:51 a.m. Mecca), Brent crude futures for July 2023 delivery rose 1.31%, to $73.45 a barrel.
US West Texas Intermediate crude futures, for June 2023 delivery, also increased by 1.20%, to record $69.38 a barrel, according to data seen by the specialized energy platform.
Crude oil prices ended their dealings, yesterday, Thursday, May 4, with a difference; US West Texas Intermediate fell, while Brent crude rose above $72, in an attempt to compensate for losses that amounted to more than 9% during the previous 3 sessions.
Over the course of the week, Brent was poised to close 8.1% lower, while WTI was poised to close 10% lower.
Oil price analysis
“It was a double whammy for crude oil prices,” said market analyst at IG Yip Jun Rong, noting that renewed US banking fallout has sparked contagion fears and amplified recession talks, while a sudden contraction in manufacturing activity in China dampened optimism. on oil demand forecasts.
Fears of a regional banking crisis in the US continued after Backwest Bancorp said it plans to explore strategic options.
In China, factory activity contracted unexpectedly in April as orders fell and weak domestic demand dampened the sprawling manufacturing sector.
Data on Friday showed that service activity in China grew through April, although the rate of expansion slowed.
OPEC+ cuts
“However, expectations of possible supply cuts at the next OPEC+ meeting in June provided some support for crude oil prices,” said Kelvin Wong, senior market analyst at OANDA.
“Yesterday’s sharp decline in WTI futures contracts was halted at a major support at $61.85,” Wong added, according to Reuters.
Traders focus on the release of US employment data for April later in the day, hoping it will help gauge the health of the economy, as well as comments on monetary policy from St. Louis Fed President James Bullard and Minneapolis Fed President Neel Kashkari at Economic Club of Minnesota.
Investors widely expect the Federal Reserve to pause rate hikes at its June meeting, after the US central bank removed language that it “expects” more rate hikes from its policy statement.
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