Friday, May 24, 2024

Oil prices rise slightly… Brent crude is above $79

Date:

During today’s trade, Thursday, July 20 (2023), oil prices edged higher in light of uncertainty over demand and profit-taking measures in an effort to recoup losses in the previous session.

A smaller-than-expected decline in U.S. oil inventories and a weaker demand outlook kept investors cautious.

After rising for the first time in 4 weeks, U.S. oil inventories fell more than expected last week, and gasoline stocks also fell, according to the weekly report released by the U.S. Energy Information Administration yesterday, Wednesday, July 19, 2023.

Oil price today

At 06:49 GMT (09:49 Mecca time), the price of benchmark Brent crude futures – for September delivery 2023 – rose 0.01% to $79.47 a barrel.

West Texas Intermediate crude — for August 2023 delivery — rose 0.07% to $75.40 a barrel, according to figures tracked by the Specialized Energy Site.

And oil prices ended their trade yesterday, Wednesday, July 19, in decline, due to economic slowdown and commodity shortages and the release of US oil inventory data.

Oil storage tanks in Japan – Photo courtesy of Reuters

Oil price analysis

“After some heavy selling pressure overnight, there is an attempt to stabilize oil prices this morning,” said Yip Jun Rong, IG market strategist. Reuters.

Oil prices fell in the previous session; Investors took profits after data showed U.S. inventories fell less than analysts expected.

Meanwhile, the US dollar index was unchanged, falling 0.2%.The outlook for demand from China, the world’s biggest crude buyer, remains unclear even as the economy remains in recession.

However, on Tuesday, China’s top economic planner pledged to implement policies to “restore and expand” consumption in the world’s second-largest economy; Which may increase oil demand; Consumer purchasing power remained weak.

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Oil is required

Citigroup analysts said in a note that crude oil prices may struggle to find clear direction in the next few weeks amid a mixed global demand outlook.

Demand “Demand for gasoline and jet fuel picked up, but petrochemical and diesel prices remained weak, a mixed picture,” the analysts added.

After being stuck in the $72-$78 range in May and June due to Saudi production cuts and geopolitical risks, Citigroup analysts noted that Brent crude had broken out of a higher range through July.

Saudi Arabia has announced it will extend a voluntary production cut of one million barrels per day that began in July until next August, with the possibility of another extension.

Under Riyadh’s voluntary reduction pledge; Saudi Arabia’s oil production is slated to reach around 9 million barrels per day in August 2023.

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Nadia Barnett
Nadia Barnett
"Award-winning beer geek. Extreme coffeeaholic. Introvert. Avid travel specialist. Hipster-friendly communicator."

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