Oil: moderate initial drop after statements by Russia rejecting OPEC cuts

Oil: moderate initial drop after statements by Russia rejecting OPEC cuts

The oil prices They fell on Thursday after Russian Deputy Prime Minister Alexander Novak downplayed the possibility of further OPEC+ production cuts at their meeting next week.

crude oil futures Brent lose US$2.1 (-2.71%) to US$75.37 a barrel, Meanwhile he West Texas Intermediate in the United States (WTI) falls US$2.41, 3.24%, to US$71.94.

OPEC announcements confuse the market

The main producers of the OPEC+ have issued a series of conflicting messages in recent days about the next steps on oil policy, making it especially difficult to predict the outcome of the next meeting.

Crude prices were supported by a warning from Saudi Arabia’s energy minister on Tuesday to short-term sellers betting on falling oil prices to “be careful.”

Some investors interpreted this warning as a sign that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, collectively called OPEC+, could consider further production cuts at the June 4 meeting.

They expect unilateral cuts from some countries

“The obvious reading is that the Kingdom could unilaterally cut oil production or orchestrate a broader cut in OPEC+, thereby supporting prices and goading speculators who are shorting oil,” analysts at MUFG bank said.

Just a week before Prince Abdulaziz bin Salman’s comment, Russian President Vladimir Putin claimed that it was necessary to cut oil production to maintain a certain price level.

Uncertainty about the US debt ceiling also weighed on prices. Indeed, House Speaker Kevin McCarthy said on Thursday that some progress had been made, but that several issues remained to be resolved in the negotiations, as the deadline for raising the debt ceiling of the federal government of US$31.4 billion or risked default.

Source: Ambito

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