OIL RISES WITH INVESTORS BETTING ON LOW PRICES AS OPEC+ INSISTS ON COMPLYING TO CUTS

Fri 08 December 2023:

Oil prices increased on Friday after investors profited from six-month-low prices and a joint call from Russia and Saudi Arabia to OPEC+ members “to adhere to the OPEC+ agreement” to support global economic growth.

International benchmark crude Brent traded at $75.56 per barrel at 10.25 a.m. local time (0725 GMT), a 2.05% increase from the closing price of $74.04 a barrel in the previous trading session on Thursday.

The American benchmark, West Texas Intermediate (WTI), traded at the same time at $70.69 per barrel, up 1.95% from Thursday’s close of $69.34 per barrel.

Ongoing supply outlook uncertainties after OPEC+ producers announced their production cuts for next year caused deep oil price fluctuations.

Both benchmarks were heading for the seventh consecutive week of losses, with Brent falling to as low as $73.60 a barrel on Thursday.

Markets were negatively impacted when prices started to fall soon after the OPEC+ cuts were announced. However, these curbs do not appear to be enough to compensate for the expected supply surplus in the first quarter of next year.

Easing these concerns and bolstering prices, a joint statement issued by Russia and Saudi Arabia following Russian President Vladimir Putin’s visit to Riyadh called all OPEC+ member countries “to adhere to the OPEC+ agreement in a way that serves the interests of producers and consumers and supports the growth of the global economy.”

Although the US Energy Information Administration (EIA) reported on Wednesday a 4.6 million barrel draw in US crude oil inventories, a 5.4 million barrel build in gasoline stocks negatively impacted market sentiment and the country’s demand growth.

Contributing further to the bearish sentiment, China’s crude imports fell 9.2% year over year in November, marking the first yearly fall since April.

-Anadolu Agency

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