Oil prices rose by more than 1% at the end of trading today, Friday, June 30 (2023), to continue to reap gains for the third consecutive session, supported by hopes for a recovery in demand for crude, but it recorded quarterly losses for the fourth time in a row.
Oil markets achieved their first monthly gain this year, as a significant drop in US oil inventories outweighed concerns that fuel demand would be more affected by further interest rate hikes.
According to the weekly report of Baker Hughes, the number of oil rigs in the United States decreased by one rig during the past week, bringing the total to 545 rigs.
Oil prices today
At the close of trading, Brent crude futures contracts – for August delivery 2023 – rose by 0.7%, to record the price of a barrel of oil at about $74.90.
US West Texas Intermediate crude futures – August 2023 delivery – also increased by 1.1%, to $70.64 a barrel, according to figures seen by the specialized energy platform.
And oil prices ended their dealings, yesterday, Thursday, June 29, on the rise, with optimism about the demand for crude, after the decline in US inventories.
Brent crude achieved weekly and monthly gains of about 1.4% and 3.2%, respectively, but it recorded losses of about 5.7% during the second quarter of 2023.
WTI also achieved weekly and monthly gains of 2.1% and 3.8%, respectively, but posted quarterly losses of 6.7%.
Oil price analysis
Brent crude achieved its first monthly gain in 2023, while US crude recorded its second gain, after gains in April.
Markets are worried about tight supplies after the US Energy Information Administration said that crude inventories fell by 9.6 million barrels in the week ending June 23, far more than the 1.8 million barrels expected by analysts in a Reuters poll.
Meanwhile, US Q1 GDP was revised upwards to 2% at an annual rate from 1.3% previously reported.
oil supplies
Strong US economic data and declining oil inventories come as Saudi Arabia plans to cut production by 1 million barrels per day in July, said market analyst Yip Jun Rong, in addition to the broader OPEC+ deal to limit supply until Year 2024.
Refinitiv data showed that Russian seaborne oil exports from Primorsk, Ust-Luga and Novorossiysk would fall to 1.9 million bpd in July from 2.3 million bpd in June, as domestic refineries ramp up for operation, which could further tighten global crude supplies. .
However, oil price gains on Friday faced headwinds from weak Chinese economic data and fears of higher interest rates.
An official survey of factories on Friday showed that manufacturing activity in China contracted for a third month in June, albeit at a slower pace, and non-manufacturing activity also declined in June.
“It wasn’t surprising to see the decline… the contraction is relatively stable, which is a source of some relief, at least things aren’t getting significantly worse,” said ING’s regional head of research, Robert Carnell.
In the US, the Federal Reserve is likely to resume its interest rate hike campaign after a break earlier in the month, as Fed Chairman Jerome Powell indicated on Thursday, after a fresh streak of stronger-than-expected economic data.
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