Oil prices rose during 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.
Oil markets are preparing for the first monthly gain this year, as a significant decline in US oil inventories overshadowed concerns that fuel demand will be affected more by further interest rate hikes.
Oil prices today
By 07:54 am GMT (10:54 am Mecca time), Brent crude futures – for August 2023 delivery – rose by 0.52%, to record the price of a barrel of oil about $ 74.73.
US West Texas Intermediate crude futures – August 2023 delivery – also increased by 0.49%, to $70.20 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.
Oil price analysis
After oil prices settled slightly higher yesterday, Thursday, both benchmarks (Brent and West Texas Intermediate) are set to rise by more than 2% in June.
The rise will be the first monthly gain for Brent crude during 2023, but it will be the second gain for WTI after gains in April.
Despite the potential monthly gains, Brent looks set for a loss of around 6% qoq, while WTI is on course for a 7% drop.
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 Robert Carnell, ING’s regional head of research.
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.
US oil rig count data, an indicator of future supplies, will be released later on Friday.
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