Saturday, 3 June 2023

Oil rises 1% with lower supplies, but records quarterly losses

Oil prices gained more than $1 a barrel on Friday, recording gains for the second week in a row, in light of lower supplies in some parts of the world and inflation data in the United States showing some signs of a slowdown in the rise in prices.

Brent crude futures for June delivery rose $1.29, or 1.6%, to settle at $79.89 a barrel. Brent contracts for May delivery, which expired upon settlement, rose 50 cents, or 0.6%, to $79.77 a barrel, with monthly losses of 4.9% and quarterly losses of 7%.

US West Texas Intermediate crude for May delivery rose $ 1.30, or 1.8%, to $ 75.67, bringing its gains to about 9% this week, and its monthly losses amounted to 1.8%, and its quarterly losses in the first quarter were 5.7%.

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Data on Friday showed that the personal consumption expenditures price index in the United States rose 0.3% in February on a monthly basis, compared to an increase of 0.6% in January and expectations of a 0.4% increase in a Reuters poll.

Any sign of slowing inflation is usually boosted by oil prices as it may point to smaller interest rate increases from the Federal Reserve, which raises investor demand for riskier assets such as commodities and stocks.

Oil prices rose after oil production in several oil fields in the semi-autonomous Kurdistan region in northern Iraq was halted or reduced following the suspension of oil exports through a pipeline in the north of the country.

Sources said the Organization of the Petroleum Exporting Countries (OPEC) and its allies led by Russia are likely to maintain compliance with the existing production agreement at Monday’s meeting, as oil prices recover from recent lows.

A Reuters survey revealed that OPEC pumped 28.90 million barrels per day this month, which is a decrease of 70 thousand barrels per day compared to February. Production decreased by more than 700 thousand barrels per day compared to September

Despite Friday’s gains, Brent and West Texas Intermediate crude recorded monthly declines of 5% and 2%, respectively, their largest drop since November.

Brent crude settled lower for the third quarter in a row, the first time this has happened since 2015.

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