The price of a barrel of oil rose globally during trading today, Wednesday, February 1 (2023), amid hopes for a recovery in demand.
This comes after signs of slowing inflation in the US eased fears that the world’s largest user of oil could face a recession due to further interest rate hikes, and a weaker US dollar boosted demand for oil.
The global price of a barrel of oil today
By 07:21 a.m. GMT (10:21 a.m. Mecca time), the price of benchmark Brent crude futures – for delivery in April 2023 – fell by 0.16%, to $85.60 a barrel.
The price of US West Texas crude futures – delivery in March 2023 – increased by 0.35%, to $ 79.15 a barrel, according to data viewed by the specialized energy platform.
And oil prices ended their dealings yesterday, Tuesday, January 31, with an increase of more than 1%, amid anticipation of the position of central banks regarding raising interest rates, but it recorded monthly losses.
During January 2023, both crudes (Brent and West Texas Intermediate) recorded monthly losses of about 1.6% and 1.7%, respectively.
Oil market conditions
“Sentiment has shifted amid a positive corporate reporting season, and signs of slowing inflation have also fueled expectations that the Fed will be able to pause rate hikes,” ANZ commodities analyst said in a note.
Expectations of a slowdown in interest rate hikes helped lower the dollar index, which supported the price of a barrel of oil globally, as a weaker dollar makes the commodity cheaper for buyers holding other currencies.
Oil market expert, Suganda Sachdeva, said: “It seems that the price of a barrel of oil globally is poised to go through a period of increased volatility.. OPEC + is likely to stick to its current production targets, however, Russia tends to increase oil exports to Asian buyers at deep discounts, which may It upsets the balance in the oil markets.”
Sachdeva added that the global growth forecast developed by the International Monetary Fund and the expectation of strong pent-up demand from China amid increased traffic are supporting oil prices.
OPEC+ meeting
On Wednesday, all eyes will be on the meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, known as the OPEC+ alliance, as producers are expected to endorse current production targets agreed upon in November.
A Reuters survey found that OPEC oil production fell in January, with Iraqi exports falling and Nigerian production not recovering.
OPEC members pumped 920,000 barrels per day less than the group’s target volumes under the OPEC+ agreement, and the shortfall was greater than the 780,000 barrels per day deficit in December.
US oil stocks
Separately, data from the American Petroleum Institute showed that US crude oil inventories rose by about 6.3 million barrels in the week ending January 27, according to market sources.
This was a larger increase than the 400,000-barrel increase expected by analysts polled by Reuters on average.
Distillate stocks, which include diesel and heating oil, rose by about 1.5 million barrels, contrary to analysts’ expectations for a decline of 1.3 million barrels.
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