Crude oil prices continued to decline by about 2% at the end of trading today, Wednesday, May 31 (2023), at a time when concerns were growing about the prospects for a slowdown in demand for crude from China (the largest oil importer in the world), in conjunction with the issuance of weaker economic data than it was. expected, in addition to the slow positive progress on the agreement on the US debt ceiling.
And the prices of benchmark Brent crude had deepened their losses by the end of trading yesterday, Tuesday, to about 4.5%, as they gave up the gains achieved in the past, due to concerns about the feasibility of the debt ceiling agreement, and its impact on market sentiment, in addition to supply expectations near the “OPEC” meeting in June. According to a Reuters report, seen by the specialized energy platform.
Some traders fear that OPEC countries will agree to a new official cut in production, which may contribute to reducing the oil supply in global markets, and at the same time raise crude oil prices again, especially since last week witnessed a decline in prices to the lowest level in May. current.
Crude oil prices today
At the end of the session, Brent crude futures – for delivery in July 2023 – fell by 1.2%, to record $72.66 a barrel.
US West Texas Intermediate crude futures – July delivery – also fell by about 2% to $ 68.09 a barrel, according to figures seen by the specialized energy platform.
Crude oil prices recorded losses after retreating from previous gains at the end of trading yesterday, Tuesday, May 30, as the two benchmarks fell by more than 4%.
The benchmark Brent crude contracts, which expire today, Wednesday, in addition to the US West Texas Intermediate crude, recorded monthly declines of more than 8.6% and 11.3%, respectively, during May 2023.
Oil price analysis
The official manufacturing purchasing managers’ index in China fell to 48.8 points during the month of May, from 49.2 points it had recorded at the end of last April, which is a shocking result, as expectations were that 49.4 points could be achieved, according to Chinese economic data seen by It has a specialized power platform.
Vivek Dar, director of commodities research at the Commonwealth Bank of Australia, said that with China’s industrial production and fixed-asset investment growing slower than expected last month, markets are concerned that commodity demand in China is weakening more quickly than expected.
On the contrary, the sentiment of traders improved slightly in America, after President Joe Biden and House Speaker Kevin McCarthy agreed to raise the US debt ceiling, amounting to $ 31.4 trillion, and to achieve new cuts in federal spending.
The agreement is scheduled to be voted on today, Wednesday, May 31, and if approved, the US administration will not need to negotiate the debt ceiling again before the presidential elections scheduled for November next year 2024.
At the same time, there are only a few days left before the “OPEC” meeting, on June 4, which is surrounded by uncertainty about whether the alliance will expand production cuts or not, which has a strong impact on crude oil prices in the market.
It is noteworthy that the Saudi Minister of Energy, Prince Abdulaziz bin Salman, had warned, during the past week, short sellers, who bet that crude oil prices would fall, which some interpreted as a hint of the possibility of agreeing to an additional reduction in production.
Leave a Reply