The price of a barrel of oil declined globally, during trading today, Monday, giving up some of the gains it achieved last week, amid fears of an economic recession.
Questions about China’s economy overshadowed the OPEC+ production cuts, and the seventh consecutive decline in the number of oil and gas rigs operating in the United States.
On Friday, the weekly report of the American company Baker Hughes showed that the number of oil rigs in the United States decreased by 4 during the past week, bringing the total to 552 rigs.
The global price of a barrel of oil today
By 07:47 am GMT (10:47 am Mecca time), the price of benchmark Brent crude futures – for August 2023 delivery – fell by 0.68%, to record $ 76.09 a barrel.
US West Texas Intermediate crude futures – delivery in July 2023 – also fell by 0.71%, to record $ 71.27 a barrel, according to figures seen by the specialized energy platform.
The global price of a barrel of oil ended its dealings, on Friday, June 16, with an increase of more than 1.5%, amid hopes for a recovery in demand in China, the largest importer of crude in the world.
During the past week, Brent and West Texas crude prices achieved gains of about 2.4% and 2.3%, respectively.
Oil price analysis
“Economic uncertainty in China may have triggered the selling after a two-day recovery in oil markets ahead of the People’s Bank of China’s decision on key lending rates this week,” said CMC Markets analyst Tina Ting.
And a number of major banks cut their GDP growth forecasts for China for the year 2023 after May data showed, last week, that the recovery after Corona was faltering in the second largest economy in the world.
China is widely expected to cut key interest rates on loans on Tuesday, after a similar cut in medium-term policy loans last week. To support the fragile economic recovery.
Sources told Reuters that China will provide more stimulus support to its slowing economy this year, but concerns about debt and capital flight will keep measures aimed at supporting weak demand in the consumer and private sectors.
However, China’s refinery productivity rose in May to its second-highest total ever; Which helped consolidate last week’s gains.
demand for oil
American energy companies have reduced the number of Oil and gas platforms Normal working hours, for the seventh week in a row, for the first time since July 2020.
The number of oil and gas rigs, an early indicator of future production, fell by 8 to 687 in the week ending June 16, the lowest level since April 2022.
A senior analyst at OANDA, Edward Moya, said that the price of a barrel of oil globally today, Monday, is also low, amid expectations that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as the OPEC + alliance, will struggle to comply with production quotas.
Moya added, “Rosneft proposes that the oil producers’ alliance focus on exports, not production,” in reference to statements made by Igor Sechin, head of Russia’s major energy company, Rosneft.
Speaking at an economic forum on Saturday, Sechin said it would be appropriate for OPEC+ to monitor oil export volumes as well as production quotas due to the different sizes of each country’s domestic markets.
Earlier this month, Saudi Arabia, the world’s largest oil exporter, pledged to make an additional one million barrel cut in its production in July.
Leave a Reply