2024-03-06 15:09:35
Oil prices rose on Wednesday, following indicators of tight supplies in light of production cuts by major producers overcame concerns regarding demand growth in China and the United States, the world’s largest crude consumers.
Brent crude futures rose 77 cents, or 0.94 percent, to $82.81 a barrel by 1351 GMT, following declining in the previous four sessions. US West Texas Intermediate crude futures increased $1.09, or 1.39 percent, to $79.24 per barrel following declining in the previous two days.
Oil prices received support from the announcement by the OPEC+ alliance, which includes the Organization of the Petroleum Exporting Countries (OPEC) and its allies, on Sunday, to extend production cuts amounting to 2.2 million barrels per day until the end of the second quarter.
The extension led to some scarcity in supply, especially in Asian markets, in addition to the disruption of oil tanker movements as a result of the Red Sea attacks launched by the Yemeni Houthi group.
Signs of tight supply became clear when Saudi Arabia, the world’s largest oil exporter, announced on Wednesday a slight increase in April crude oil sales prices to Asia, its largest market.
China’s targeted economic growth rate for 2024 of regarding five percent lacks major stimulus plans to support the country’s faltering economy, which has increased concerns that demand growth in China may be delayed this year. Beijing announced this goal yesterday, Tuesday.
“The market wanted more detail on how China intends to achieve its five percent growth target for 2024, and was specifically hoping to see further fiscal expansion to help achieve the growth target,” said Tony Sycamore, market analyst at IG in Sydney. .
Sycamore added that the markets are looking forward to the semi-annual monetary policy testimony of US Federal Reserve Chairman Jerome Powell before Congress, today, Wednesday and tomorrow, Thursday, and the US employment data on Friday.
In prepared remarks to Congress on Wednesday, Powell said the Fed still expects to cut interest rates later this year, although policymakers still need “more confidence” in inflation’s continued decline before cutting.
Investors believe that the Federal Reserve’s cut signals are positive for the economy and demand for oil.
US nonfarm payrolls data on Friday is expected to show an increase of 200,000 jobs in February following a rise of 353,000 jobs in January, according to a Reuters survey.
On the other hand, ceasefire talks in Gaza reached a dead end on Wednesday, raising a state of uncertainty and concern regarding the expansion of the conflict in the Middle East, one of the main oil producing regions in the world.
Market sources said that the first of two US inventory reports this week, issued by the American Petroleum Institute, showed that US crude inventories rose by 423,000 barrels in the week ending March 1, which is much less than the increase expected by analysts in a Reuters poll of 423,000 barrels in the week ending March 1. 2.1 million barrels.
Petroleum Institute data showed that gasoline stocks fell by 2.8 million barrels and distillate stocks fell by 1.8 million barrels.
Official data from the US Energy Information Administration is scheduled to be issued today, Wednesday, at 1530 GMT. If the EIA announces an increase in crude oil inventories, this will be the sixth week in a row that the country’s oil inventories have risen.
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