Vienna, 3 May 2024, (GNP): Oil prices increased today over expectations that the Organisation of the Petroleum Exporting Countries and its allies, known as OPEC , would continue production cuts.
It’s not uncommon for oil prices to react to expectations surrounding OPEC+ decisions. Anticipation of production cuts often influences market dynamics.
Brent crude traded at $84.02 per barrel at 10:16 a.m. local time, up 0.42% from the previous session’s close of $83.67 per barrel.
West Texas Intermediate traded at $79.28 per barrel at the same time, marking a 0.42% increase from the previous session’s close of $78.95 per barrel.
Oil prices saw a significant decline, hitting their lowest point in the past seven weeks. This drop was attributed to diminishing supply risks in the Middle East, as negotiations for a cease-fire between Israel and Hamas eased tensions in the region.
Moreover, concerns about a potential slowdown in demand emerged as the US Federal Reserve opted to maintain its current interest rate policy, raising uncertainties about the trajectory of the US economy.
These dual factors contributed to a bearish sentiment in the oil market, leading to the notable decrease in prices. I
nvestors closely monitored geopolitical developments and economic indicators for further insights into future price movements.
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Despite the downward trend, there was some support for higher prices stemming from the potential continuation of production cuts by the OPEC+ group, spearheaded by Saudi Arabia and Russia.
This possibility provided a counterbalance to the prevailing market sentiment and contributed to a degree of stability in oil prices.
The recent price declines coincide with the upcoming OPEC+ group meeting scheduled for June 1. Analysts anticipate that if oil demand fails to rebound by June, OPEC, seeking to support prices, might opt to extend its voluntary production cuts of 2.2 million barrels per day.
