The price of a barrel of oil globally turned higher, during trading today, Thursday, June 15 (2023), in an attempt to compensate for the losses it suffered during the previous session, amid fears of a supply shortage after Saudi Arabia pledged to provide additional production cuts by one million barrels per day in July. next.
The growth in industrial production and retail sales in China, which came in below expectations, limited the gains; It reinforced concerns about a weak economic recovery in the world’s largest oil importer.
Oil prices fell in early trading, amid fears of a decline in demand after the data showed a significant increase in oil and fuel stocks in America.
The global price of a barrel of oil today
By 06:45 am GMT (09:45 am Mecca time), the price of benchmark Brent crude futures – for August 2023 delivery – rose by 0.38%, to record $ 73.48 a barrel.
US West Texas Intermediate crude futures – July 2023 delivery – also increased by 0.41%, to record $68.55 a barrel, according to figures seen by the specialized energy platform.
And the global price of a barrel of oil ended its dealings, yesterday, Wednesday, June 14, with a decrease of more than 1.5%, after the rise in US inventories, and the Federal Reserve’s decision to keep interest rates unchanged, for the first time since March 2022.
Oil price analysis
Oil prices are under pressure after the US Federal Reserve predicted the need for more rate hikes this year; This raised concerns that the high interest rate environment will lead to a slowdown in the economy and lower demand for oil.
Data from China on Thursday did little to calm demand concerns, with signs that its economic recovery has run out of steam.
China’s industrial output grew 3.5% in May, down from a 5.6% increase in April, and slightly less than the 3.6% increase expected by analysts in a Reuters poll; Manufacturers suffered from weak demand at home and abroad.
The country’s retail sales, a key gauge of consumer confidence, rose 12.7%, missing expectations for a 13.6% growth, down from 18.4% in April.
demand for oil
Philip Nova Market Analyst Priyanka Sachdeva said the dismal Chinese data was weighing on the price of a barrel of oil globally.
“China’s post-COVID-19 recovery has been bumpy, and the weak economic situation in the first quarter completely removed any expectations of a China recovery, pushing global oil demand to record levels,” Sachdeva added.
In another bearish sign of oil demand, US crude oil inventories rose by about 8 million barrels in the week ending June 9, according to data from the Energy Information Administration. Gasoline and diesel more than expected.
“Looking at the US, the start to the driving season appears to be soft, and while the overall implied demand for oil, excluding natural gas liquids and other oils, still points to an annual decline of 0.3 million barrels per day,” Citi analysts said on Thursday.
Adding to market concerns about weak fuel demand, the European Central Bank is certain to raise borrowing costs to a 22-year high on Thursday, leaving the door open for further increases.
A Reuters poll of economists found that the Bank of England is far from done raising interest rates as it battles inflation.
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