Crude oil prices rose by more than 1%, at the close of trading today, Tuesday, May 23 (2023), for the second day in a row, supported by investor expectations of market restraint, in light of the seasonal increase in demand for gasoline.
Investors also expected supply cuts by some OPEC+ producers, who announced a voluntary cut of 1.66 million barrels per day, to move global crude prices higher, according to Reuters.
For his part, Saudi Energy Minister Prince Abdulaziz bin Salman stressed that the OPEC+ alliance plays a major role in balancing the oil market, noting that the alliance has 3 goals, which are vigilance, initiative, and precaution.
Crude oil prices today
At the end of the session, Brent crude futures contracts – for delivery in July 2023 – rose by about 1.1%, to reach $ 76.84 a barrel.
At the same time, US West Texas Intermediate crude futures – for July 2023 delivery – rose 1.2%, to record $ 72.91 a barrel, according to what was seen by the specialized energy platform.
The rise in crude oil prices is supported by the voluntary cuts initiated by some OPEC + countries, despite the fears in the US financial markets that the US will default on its debts, which limited the gains.
Crude oil prices witnessed a decline at the beginning of trading yesterday, Monday, before returning to an increase during transactions, as the benchmark Brent crude rose to the $76 mark, according to information seen by the specialized energy platform.
Oil price analysis
Hiroyuki Kikukawa, president of NS Trading Corporation, a unit of Nissan Securities, said that the rise in US gasoline futures contracts contributed significantly to the recent rise in crude oil prices.
He pointed to expectations that the voluntary production cuts – announced by some OPEC + countries, which entered into force this month – would keep oil markets tight, according to the analysis seen by the specialized energy platform.
At the same time, Goldman Sachs analysts said that they expect a sustainable deficit in oil supplies from next June 2023, with the full implementation of OPEC + production cuts and a further increase in demand for oil supplies globally.
In turn, an executive in Vitol said yesterday, Monday, that Asia will lead much of the growth in oil demand, as it is expected to add about two million barrels per day of consumption in the second half of this year 2023.
Last week, the US Department of Energy said it would buy 3 million barrels of crude oil to replenish the Strategic Petroleum Reserve, which is scheduled for delivery in August, which comes as investors focus on negotiations to raise the US debt limit.
A debt default in the United States is likely to lead to chaos in financial markets and higher interest rates, which will affect the growth of fuel demand locally and globally.
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