Crude oil prices are rising.. Brent crude is above $73 a barrel

Crude oil prices are rising.. Brent crude is above $73 a barrel

Crude oil prices witnessed a noticeable increase, at the beginning of today’s trading, Thursday, June 1 (2023), after they fell at the end of trading on Wednesday, May 31, supported by the possibility of stopping raising US interest rates, and taking decisive action to prevent default on the US debt, This contributed to the prevailing optimism about the increase in oil demand growth in China.

On Wednesday, May 31, US Federal Reserve officials indicated the possibility of stopping raising interest rates during the month of June (2023), according to a Reuters report, seen by the specialized energy platform.

In addition, the passage of a bill suspending the public debt ceiling of $31.4 trillion in the US House of Representatives improved the chances of avoiding default.

This came after crude oil prices fell, yesterday, Wednesday, May 31, by about 2%; As concerns increased about the possibility of slowing demand from China, and the slow positive progress on the agreement on the debt ceiling in the United States of America.

In addition, some traders feared that OPEC countries may be heading for another production cut; This may lead to a reduction in the oil supply in the markets and an increase in crude oil prices.

Crude oil prices today

By 07:10 am GMT (10:10 am Mecca time), Brent crude futures – August delivery (2023) – rose by 0.62%, to record $ 73.05 a barrel.

While US West Texas Intermediate crude futures rose by 0.60% to $68.50 a barrel, according to figures seen by the specialized energy platform.

During the month of May (2023), Brent crude contracts, which expired on Wednesday, May 31, and West Texas Intermediate crude recorded monthly declines of more than 8.6% and 11.3%, respectively.

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drilling platform
Drilling rig. Image courtesy of USA Today

Crude oil price analysis

Market analyst at CMC Markets in Auckland, Tina Teng, said that oil markets may have been oversold during the past two trading days, which she attributed to slowing Chinese data and concerns about the US debt ceiling.

She added that market sentiment had rebounded with the passage of the debt law, along with the possibility of halting interest rate hikes.

Indicators of oil demand in China, the world’s largest oil importer, varied somewhat this week.

And official government data showed, on Wednesday, May 31, that factory activity contracted to the lowest level in 5 months during the past month, while activity in the services sector increased at the slowest pace in 4 months.

oil stocks

On the other hand, US oil inventories rose by about 5.2 million barrels last week, according to market sources, quoting American Petroleum Institute figures, on Wednesday, May 31.

Gasoline inventories jumped by 1.9 million barrels last week, while distillate inventories rose by 1.8 million barrels.

Investors are awaiting government data on US oil stocks, today, Thursday, June 1, in addition to waiting for the results of the next OPEC + meeting on June 4.

Analysts at HSBC and Goldman Sachs had indicated that they did not expect OPEC + to announce further cuts.


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