Crude oil prices rose by more than 1%, at the end of trading today, Monday, April 24 (2023), with the decline in the US dollar and optimism about demand in China.
This comes amid expectations of a decline in global fuel demand, which outweighed support from the possibility of supply cuts due to OPEC+ supply cuts.
The voluntary cuts approved by 9 OPEC + countries, led by Saudi Arabia, are scheduled to begin next May. This raises the total reduction of the coalition to 3.66 million barrels per day until the end of this year.
Crude oil prices today
At the end of the session, Brent benchmark crude futures – for June 2023 delivery – rose 1.3%, to $82.73 a barrel.
West Texas Intermediate crude futures – for June 2023 delivery – rose 1.1%, to record $ 78.76 a barrel, according to what was seen by the specialized energy platform.
Crude oil prices ended their trading, on Friday, April 21, on the rise, in an attempt to reduce the losses incurred during the previous two sessions.
Oil price analysis
Crude oil prices fell more than 5% over the past week, their first weekly drop in 5 weeks. The implied demand for gasoline in the United States is down from a year ago; This raised fears of a recession in the world’s largest oil consumer.
The two benchmarks (Brent and West Texas Intermediate) fell by 5.4% and 5.5%, respectively, during the past week.
Analyst at CMC Markets, Tina Teng, said that weak US economic data and disappointing corporate earnings from the technology sector raised concerns about growth and risk aversion among investors.
She added that the stability of the US dollar and the rise in Treasury bond yields increase pressure on commodity markets, according to Reuters.
demand for oil
Central banks from the US to Britain and Europe are expected to raise interest rates when they meet in the first week of May, in a bid to tackle stubbornly high inflation.
China’s bumpy economic recovery from Corona has also clouded the outlook for oil demand, although Chinese customs data showed, on Friday, that the world’s largest importer of crude brought in record quantities in March.
China’s imports from major suppliers Russia and Saudi Arabia exceeded two million barrels per day each, according to data monitored by the specialized energy platform.
However, refining margins in Asia fell due to record production from the largest refineries in China and India; This dampened the region’s appetite for loading Middle East supplies in June.
OPEC+ cuts
However, analysts and traders remained optimistic about a recovery in fuel demand in China by the second half of 2023, with additional supply cuts planned by the OPEC+ alliance from May leading to limited supplies in the markets.
“Planned production cuts by the OPEC+ alliance and strong demand expectations from China could provide a catalyst for prices in the coming days,” said independent oil market expert Suganda Sachdeva.
He added that Brent crude was likely to find major support around $79 a barrel, while WTI crude was supported at $75 a barrel.
Energy services company Baker Hughes said that energy companies in the United States added, last week, rigs for oil and natural gas for the first time in 4 weeks.
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