SINGAPORE, May 15 (Portal) – Oil prices eased on Monday as concerns over fuel demand among the world’s biggest oil consumers, the US and China, fueled optimistic sentiment about a tightening in supply due to possible OPEC+ cuts and a resumption of US purchases for Reserves compensated.
Brent crude futures were down 62 cents, or 0.84%, to $73.55 a barrel by 0348 GMT, while US West Texas Intermediate crude was trading at $69.48 a barrel, down 56 cents, or 0. corresponds to 8%.
Last week, both benchmarks fell for a fourth consecutive month, the longest streak of weekly declines since September 2022, amid fears the United States could enter a recession due to “significant risk” of a historic default within the first two weeks of June.
Investors sought safe havens like the US dollar, which strengthened the currency and made dollar-denominated commodities more expensive for holders of other currencies.
“Oil prices are still under pressure from the sluggish demand outlook as China’s economic reopening progress appears to be bumpy,” said Tina Teng, an analyst at CMC Markets, adding that the US banking crisis has also caused market jitters.
Investors will scour China’s broad economic data on industrial production, fixed asset investment and retail sales next week for signs of improving oil demand, she said.
“Given China’s uneven reopening and fears that the US is facing a slowdown in growth as debt ceiling X-date fast approaches, coupled with a US dollar recovery, market sentiment towards crude oil has turned lukewarm at best stay,” said IG analyst Tony Sycamore.
Still, global crude stocks could tighten in the second half of the year as OPEC+, the Organization of Petroleum Exporting Countries, and its allies, including Russia, implement further production cuts that reduce the availability of sour crude.
The group announced in April that some members will further cut production by about 1.16 million barrels per day, bringing the total cuts to 3.66 million barrels per day, according to Portal calculations.
However, Iraq does not expect OPEC+ to make further oil production cuts at their next meeting in June, its oil minister Hayan Abdel-Ghani said.
The US could begin buying back oil for the Strategic Petroleum Reserve (SPR) after completing a Congress-ordered sale in June, Energy Secretary Jennifer Granholm told lawmakers Thursday.
That announcement followed a weekly report from energy services company Baker Hughes Co (BKR.O), which showed the US oil rig count fell by two this week to 586, its lowest since June 2022, while the gas rig count fell by 16 141 sank.
Meanwhile, leaders of the Group of Seven (G7) may announce new measures aimed at circumventing sanctions against third countries at their May 19-21 meetings, officials with direct knowledge of the discussions said.
The tightening of sanctions will also aim to undermine Russia’s future energy production and stem trade that supports the Russian military, the people said.
India and China, the world’s top crude oil importers, have been the top buyers of Russian crude since the European Union’s embargo began in December.
Reporting by Florence Tan; Edited by Muralikumar Anantharaman
Our standards: The Trust Principles.