📖 Your Q2 Earnings Guide: Discover the Stocks ProPicks AI Highlights to Jump Post-EarningsRead more

Crude oil lower, but still heading for positive week

Published 04/06/2023, 09:08 AM
Updated 04/06/2023, 09:28 AM
© Reuters.

By Peter Nurse   

Investing.com -- Oil prices edged lower Thursday, but are still heading for a third consecutive positive week with sentiment buoyed by the surprise decision of OPEC+ to cut its production levels and a hefty drop in U.S. crude stocks. 

By 09:20 ET (13:20 GMT), U.S. crude futures traded 0.1% lower at $80.50 a barrel, while the Brent contract fell 0.1% to $84.92 a barrel.

Both benchmarks are on course to register gains of over 7% this week after the Organization of the Petroleum Exporting Countries and allies including Russia, a group known as OPEC+, announced at the start of the week additional output cuts of just over 1 million barrels per day from May.

“Given that most of these members are producing at or near their current quota levels suggests that actual supply reductions will not be too dissimilar to the paper cuts announced,” ING said, in a note.

Official weekly data also showed that U.S. crude stockpiles fell sharply for a second week in a row as domestic refiners prepared for busy summer travels.

U.S. crude inventories fell by 3.74 million barrels last week, according to data from the U.S. Energy Information Administration released Wednesday, adding on to a fall of 7.5 million barrels the week before.

The strong gains, particularly at the start of the week, prompted Saudi Arabia to lift its official selling price for all of its grades of crude oil into Asia for May. 

“This is the third consecutive month of increases in the OSP as China sees a recovery in demand following the dropping of its zero-Covid policy,” added ING.

However, gains are being restrained Thursday after the number of new applications for unemployment insurance in the U.S. soared by 228,000 last week, much more than expected, in the latest sign of cooling in the U.S. labor market.

This release adds to a steady stream of economic data releases which have raised concerns over economic growth in the world’s largest economy, and largest consumer of crude.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.