Crude oil prices rose more than 3% this Tuesday, June 13, in the international markets of New York and London, after the Central Bank of China lowered the rate on short-term loans for the first time in 10 months.
crude oil futures Brent rose US$2.21 (+3.1%) to US$74.05 a barrel, while those of the American West Texas Intermediate (WTI) earned $2.06 (+3.1%), to $69.18.
He China rate cutset to give new impetus to the faltering post-pandemic recovery of the world’s second-largest economy and largest importer of crude oil, is likely to boost demand for oil.
The prices had fallen about 4% on Mondaypartly due to concerns about the Chinese economy after last week’s disappointing economic data.
“The market is showing a rebound from yesterday,” he said. Phil Flynngroup analyst Price Futures. “Monday was exaggerated, with doomsayers and pessimists.”
“For market participants to build up long positions again, they will likely need to see further drawdowns in inventories,” the equity strategist said. UBS Giovanni Staunovoadding that he expected this to happen in a matter of weeks.
Rising global supply is weighing on the market, along with concerns about demand growth, ahead of the EU’s monetary policy meeting. Federal Reserve of the United States, which concludes on Wednesday. Most of the Market players expect the Fed to keep interest rates unchangedespecially after data showed US consumer prices barely rose in May.
The European Central Bank is expected to raise interest rates on Thursday.
Concerns about demand have undid the temporary boost to oil prices that Saudi Arabia’s pledge, announced this month, to further cut output in July gave.
OPEC maintained its growth forecast for 2023
OPEC maintained its growth forecast for world oil demand for 2023 for the fourth monthalthough the producer group warned that the world economy faces increasing uncertainty and slower growth in the second half of the year.
Global oil demand in 2023 will increase by 2.35 million barrels per day (bpd), or 2.4%, the company said. Organization of Petroleum Exporting Countries (OPEC) in its monthly report. This figure is virtually unchanged from the 2.33 million bpd forecast last month.
“Uncertainties about economic growth in the second half of 2023 are increasing, in a context of high inflation, already high interest rates and tense labor markets”said OPEC in its report.
“In addition, it is not yet clear how and when the geopolitical conflict in Eastern Europe will be resolved”he added in reference to Ukraine.
OPEC+, made up of OPEC, Russia and other allies, has been taking more steps to support the oil market in 2023.
On June 4, it announced its second package of production cuts since April. However, crude oil prices have remained under pressure due to concerns about slowing economic growth and demand.
The report showed that OPEC oil production fell in May, reflecting the impact of earlier cuts promised by OPEC+, as well as some unplanned disruptions.
OPEC said in the report that its May production fell by 464,000 bpd.to 28.06 million bpd, as voluntary cuts promised by Saudi Arabia and other members take effect.
Last year, Faced with weakening prices, OPEC+ agreed to a 2 million bpd cut to its production target from Novemberin its biggest reduction since the COVID-19 pandemic in 2020. On April 2, several OPEC+ members promised additional voluntary cuts.
Source: Ambito
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