Crude oil prices rose for the second day in a row today, Tuesday, May 23 (2023), on investors’ expectations of market restraint in light of a seasonal increase in demand for petrol.
Investors were expecting supply cuts by some OPEC+ producers, who announced a voluntary cut of 1.66 million barrels per day, lifting global crude prices. Reuters.
Crude oil prices fell in early trade yesterday, Monday, before returning higher during trading, with benchmark Brent crude rising to $76, according to data seen by the specialist energy site.
Crude oil price today
At 6:30 a.m. GMT (9:30 a.m. Mecca time), benchmark Brent crude futures — for delivery in July 2023 — were up 0.37%, or 28 cents, at $76.34 a barrel.
Meanwhile, U.S. West Texas Intermediate crude futures – for delivery in July 2023 – rose about 31 cents, or 0.43%, to $72.36 a barrel, as seen by the specialized energy site.
The rise in crude oil prices was supported by voluntary cuts initiated by some OPEC+ countries, despite fears that the US could default on its debts in US financial markets, which limited gains.
Today, Tuesday, May 23, 2023, was the second day of gains for oil, after a long day of declines and weekly losses, which coincided with a 2.8% rise in US gasoline futures.
Oil price analysis
Hiroyuki Kikugawa, president of NS Trading Corp., a unit of Nissan Securities, said the rise in gasoline futures contracts in the U.S. contributed significantly to the recent rise in crude oil prices.
He pointed to expectations that voluntary production cuts announced by some OPEC+ countries, which took effect this month – would keep oil markets tight, according to analysis by the specialist energy platform.
At the same time, Goldman Sachs analysts expect a permanent shortfall in oil supply from next June 2023, as OPEC+ production cuts and global demand for oil supplies increase further.
In turn, an executive at Vitol said yesterday on Monday that Asia will lead the bulk of oil demand as consumption is expected to rise by around two million barrels per day this year through the second half of 2023.
Last week, the U.S. Energy Department said it would buy 3 million barrels of crude oil to replenish strategic petroleum reserves, scheduled for delivery in August, as investors focused on negotiations to raise the U.S. debt ceiling.
A debt default in the United States would lead to chaos in financial markets and higher interest rates, which would affect the growth of fuel demand both domestically and globally.
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