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Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

Oil Prices Rise from Lowest Levels in 4 Months


Thu 06 Jun 2024 | 12:43 AM
Oil storage tanks in Osaka Bay, Japan Source: Bloomberg
Oil storage tanks in Osaka Bay, Japan Source: Bloomberg
Taarek Refaat

Oil prices rose in trading on Wednesday from their lowest level in four months, as traders tried to determine the bottom floor for the price after several days of declines.

West Texas Intermediate  (WIT) rose more than 1% after five consecutive days of losses, reaching levels of $74 per barrel upon settlement. This is after the market entered the oversold zone as a result of the OPEC+ plan to enhance supply starting next October.

Prices fell earlier in today's session, after the US Energy Information Administration reported that crude inventories increased by 1.23 million barrels.

Oil prices fell by about 4% this week after the OPEC+ alliance decided on Sunday to begin reducing supply cuts in the fourth quarter of this year, despite concerns about demand and increased production from outside the group. While traders who rely on trend-following algorithms contributed to the exacerbation of selling operations.

Oil Prices

WTI CRUDE • $74.07 +0.82 +1.12%

BRENT CRUDE • $78.58 +1.06 +1.37%

MURBAN CRUDE • $78.95 +0.89 +1.14%

NATURAL GAS • $2.757 +0.171 +6.61%

LOUISIANA LIGHT • $81.51 -1.33 -1.61%

BONNY LIGHT • $76.54 -0.95 -1.23%

OPEC BASKET • $78.17 -3.13 -3.85%

MARS US • $76.83 -1.47 -1.88%

GASOLINE •  $2.354 +0.004 +0.17%

While the Organization of the Petroleum Exporting Countries and its allies may have spooked the market with their decision, RBC Capital Markets predicts that the Saudi-led group will "re-press the cut button" if market weakness continues with oversupply. While most analysts expected OPEC+ to extend the restrictions until the end of the year.

The alliance is already hinting at concerns about consumption, with Saudi Aramco, the largest producer in the alliance of producing countries, cutting crude prices to Asia for next month amid doubts about the strength of demand.