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Oil suffers weekly losses of 2.1%… and expectations of an extension of the production cut at the OPEC+ meeting

Oil suffers weekly losses of 2.1%... and expectations of an extension of the production cut at the OPEC+ meeting

Global markets are awaiting the OPEC+ meeting on June 2 to discuss whether to extend voluntary oil production cuts of 2.2 million barrels per day.

In this context, analysts expect the current production cuts to be extended at least until the end of September. Oil prices rose 1% yesterday despite a weekly loss of more than 2% due to concerns that US interest rates will be kept high for a longer period, which could reduce fuel demand . This trend is reinforced by American economic data, indicates the federal government. The reserve will continue to tighten monetary policy.

High interest rates lead to an increase in the cost of borrowing, which generally leads to a slowdown in economic activity and a decline in demand for oil. The analysts wrote: Morgan Stanley In a note, oil demand remains strong from a broader perspective, with total petroleum liquids consumption increasing by around 1.5 million barrels per day in the current year.

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In addition, it increased Brent crude futures July deliveries rose 76 cents to $82.12 a barrel, and the most widely traded August futures saw an increase at settlement of about 73 cents to $81.84 a barrel, while U.S. West Texas Intermediate crude futures rose about 85 cents, or 1.1%. , to record settlement at $77.72 per barrel.

Brent crude futures reached their lowest levels since February 7 the day before yesterday, Thursday, and US crude futures recorded their lowest level since February 23. Brent ends the week down 2.1%. He has fallen for four straight sessions this week, the longest losing streak since January 2. West Texas Intermediate crude finished the week down 2.8%.

Minutes from the Federal Reserve’s latest meeting Wednesday show policymakers questioning whether current interest rates are high enough to curb inflation. Some officials have said they would be willing to raise borrowing costs again if inflation rises.

Analysts believe that weak gasoline demand in the United States was offset by a sudden increase in global demand, particularly during the first months of the year. The U.S. Energy Information Administration reported Wednesday that gasoline demand rose to its highest level since November in the week ending May 17.

Read alsoOil prices fell at midday today, Thursday May 23, 2024.

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