The price of a barrel of oil rose globally, during trading today, Friday, June 16 (2023), amid hopes for a recovery in demand in China, the largest importer of crude in the world.
It is expected that the weekly oil market losses will stop, after declining for two consecutive weeks, amid fears of a shortage of supplies, on the back of Saudi Arabia’s pledge to provide additional production cuts by one million barrels during next July.
Oil prices fluctuate between rise and fall. At a time when the dollar’s decline supports the demand for crude; Rising fuel inventories in the US and raising interest rates by some major economies are a headwind.
The global price of a barrel of oil today
By 07:05 am GMT (10:05 am Mecca time), the price of benchmark Brent crude futures – for August 2023 delivery – rose by 0.28%, to record $ 75.88 a barrel.
US West Texas Intermediate crude futures – July 2023 delivery – also increased by 0.20%, to record $ 70.76 a barrel, according to figures seen by the specialized energy platform.
And the global price of a barrel of oil ended its dealings, yesterday, Thursday, June 15, with an increase of more than 3%, with the decline of the US dollar and fears of a shortage of supplies.
demand for oil
Data on Thursday showed that the productivity of oil refineries in China increased by 15.4% in May from a year earlier, marking the second highest total ever.
The CEO of Kuwait Petroleum Corporation said that Chinese demand for oil is expected to continue to rise at a guaranteed rate during the second half of the year.
In the US, data released on Thursday showed retail sales rose unexpectedly in May, along with jobless claims that beat expectations last week.
Meanwhile, the dollar fell to a 5-week low against a basket of other currencies; This makes oil cheaper for holders of other currencies, and boosts demand.
OPEC cuts
Analysts expect that the voluntary cuts in crude production implemented by the Organization of the Petroleum Exporting Countries (OPEC) and its allies led by Saudi Arabia in July will support the price of a barrel of oil globally.
However, a weak economic outlook looms large on market sentiment; China’s industrial output and retail sales growth in May beat expectations.
“The global price of a barrel of oil is trying to get support, as the global growth outlook remains vulnerable to further shocks from interest rate hikes,” said OANDA analyst Edward Moya, according to Reuters.
The European Central Bank raised interest rates to a 22-year high as expected on Thursday, and the US Federal Reserve this week signaled an increase of at least half a percentage point by the end of the year.
Higher interest rates ultimately increase borrowing costs for consumers; This may slow economic growth and reduce demand for oil.
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