Crude oil prices rose marginally, during today’s trading, Monday, April 10 (2023), with investors assessing the possibility of tightening supplies after 9 OPEC + countries, led by Saudi Arabia, announced production cuts.
Concerns about weak global growth, which could dampen fuel demand, limited the oil market’s gains, amid anticipation of US inflation data.
OPEC + had raised the total volume of alliance cuts to 3.66 million barrels per day; Including a reduction of two million barrels in October, equivalent to about 3.7% of global demand.
Crude oil prices today
By 08:05 AM GMT (11:05 AM Mecca time), Brent crude futures for June 2023 delivery rose 0.02%, recording $85.14 a barrel.
West Texas Intermediate crude futures – for May 2023 delivery – increased by 0.07%, recording $80.76 a barrel, according to what was seen by the specialized energy platform.
On Thursday, April 6th, crude oil prices ended higher, recording a third consecutive weekly gain.
Oil market analysis
Crude oil prices rose, during the past week, for the third week in a row, to return to the levels last seen in November, after countries from the Organization of the Petroleum Exporting Countries (OPEC) and its allies decided to announce more production cuts that will begin in May. May.
Brent and West Texas Intermediate rose about 6% and 6.7%, during the past week, supported by the OPEC + countries’ pledge to voluntary cuts in production.
Following the announcement, Saudi Arabia, the world’s largest oil exporter, raised crude prices for the month of May for clients in Asia and the United States.
Saudi Aramco has also notified several Asian customers that they will receive full contract volumes in May despite the production cuts.
Oil price forecast
“The oil market was divided into two teams; those who saw it going down were questioning the demand outlook in light of the cuts, and the other team was bullish and saw a tighter market in the second half,” said Warren Patterson, head of commodity research at ING.
He added: “I am in the latter camp and I still see that crude oil prices will rise until the end of this year,” according to Reuters.
Separately, investors are watching the progress of talks between Iraq and Kurdistan to resume oil exports to Turkey which could bring more crude to the global market.
Oil prices received support from the decline in the number of US oil rigs by 2 to 590, last week, while the number of gas rigs fell by 2 to 158, according to a Baker Hughes report, on Thursday, in a sign that US production will not increase in the near term.
Inflation in America
In global financial markets, the closely watched US inflation report to be released this week may help investors gauge the path of interest rates in the near term.
Despite expectations that the Federal Reserve may slow down interest rate hikes due to the recent banking crisis; Borrowing costs may continue to rise if inflation remains strong.
Sharp rises in interest rates boosted the dollar; This made dollar-denominated commodities such as oil more expensive for investors who hold other currencies.
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