Crude oil prices rose by more than 1%, at the close of trading today, Friday, May 26, 2023, in light of the uncertainty about demand and the possibility of OPEC + heading to cut production.
Conflicting messages from major OPEC+ producers regarding upcoming moves in oil policy in recent days have made it difficult to predict the outcome of the next meeting scheduled for June 4 (2023).
Crude Brent and West Texas Intermediate fell by about two dollars at the settlement, yesterday, Thursday, May 25, 2023, after Russian Prime Minister Alexander Novak ruled out taking new steps from the OPEC + alliance regarding production cuts during the meeting to be held in Vienna.
Baker Hughes data showed that the number of oil rigs in the United States decreased by about 5 rigs, to continue to decline for the fourth consecutive week.
Crude oil prices today
At the end of the session, futures contracts for Brent crude oil – delivery in July 2023 – rose by 0.9%, to $ 76.95, according to what was monitored by the specialized energy platform.
US West Texas Intermediate crude futures – for July delivery – rose 1.2%, to record $72.67 a barrel.
Crude oil prices fell more than 3%, at the end of yesterday’s trading, Thursday, May 25, 2023, in light of the uncertainty about whether the United States will avoid debt default, and the possible OPEC + cuts.
During the week ending today, Brent and West Texas Intermediate crude recorded weekly gains of about 1.8% and 1.4%, respectively.
Crude oil price analysis
Markets continue to monitor the US debt ceiling talks, and it appears that US President Joe Biden and House Speaker Kevin McCarthy are close to reaching an agreement to cut spending and raise the debt ceiling.
The rise of the US currency for the fifth consecutive session against a basket of currencies affected the upward trend in oil prices.
A stronger US dollar makes commodities denominated in it more expensive for holders of other currencies; What restricts demand.
Citigroup said there were numerous indications that global demand growth was unlikely to come close to the previous year’s forecast.
She added, “We will see a reduction in demand in the near future, and this will continue to negatively affect the oil market sentiment in the near term.”
production cuts concerns
On Wednesday, May 24, Russian President Vladimir Putin said that energy prices are close to “economically justifiable” levels, indicating that his country will continue to fulfill its energy supply commitments.
Meanwhile, Saudi Energy Minister Prince Abdulaziz bin Salman sent a warning message to speculators during the Qatar Economic Forum, on Tuesday, May 23; “The speculators – as in any market – remain. I keep telling them that they will suffer. They suffered in April. I don’t have to show my cards, but I will just tell them to beware,” he said.
Some investors speculated that these comments indicated that OPEC and the OPEC+ alliance may be heading for further production cuts at the meeting on June 4th.
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