Oil prices rise as supplies tighten and OPEC+ expected to extend cuts

One sentence summary – Oil prices have increased for a fourth consecutive session due to tightening supplies, the expectation of OPEC+ extending output cuts, and positive market indicators such as a decrease in US crude inventories and Chinese factory activity returning to expansion.

At a glance

  • Oil prices have risen for a fourth consecutive session, ending a two-week losing streak.
  • Tightening supplies and the expectation of OPEC+ extending output cuts are the main reasons for the increase.
  • US West Texas Intermediate crude (WTI) rose by 1% to $84.45 per barrel.
  • Brent crude increased by 0.9% to $87.65 per barrel.
  • Saudi Arabia is predicted to extend a voluntary oil production cut of 1 million barrels per day into October.

The details

Oil prices have risen for a fourth consecutive session, marking an end to a two-week losing streak.

This increase is largely due to tightening supplies and the expectation that OPEC+ will extend output cuts.

US West Texas Intermediate crude (WTI) experienced a 1% rise, reaching $84.45 per barrel.

Brent crude also saw an increase, rising by 0.9% to $87.65 per barrel.

Industry analysts predict that Saudi Arabia, a key player in the global oil market, will extend a voluntary oil production cut of 1 million barrels per day into October.

Russia, the world’s second-largest oil exporter, has also agreed to reduce oil exports.

US crude inventories saw a significant decrease last week, with a drop of 10.6 million barrels.

This decrease surpassed expectations and is often seen as an indicator of shifts in the global production-consumption balance.

The product market has shown signs of stronger demand.

Implied gasoline demand has shown an increase, suggesting an improvement in market sentiment.

The US dollar, which has been on a six-week winning streak, is showing signs of weakening.

This weakening of the US dollar has played a role in boosting oil prices.

Chinese factory activity has returned to expansion, positively influencing oil prices.

Moves made by Beijing to support the housing market have also contributed to the increase in oil prices.

These factors, including tightening supplies, expectations of OPEC+ extending output cuts, and positive market indicators, have all contributed to the recent rise in oil prices.

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A pixelated oil barrel with a rising arrow symbolizing increasing prices and a pair of scissors cutting a pipeline to represent OPEC+ extending cuts.

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cnbc.com
– Oil prices rose for a fourth consecutive session, snapping a two-week losing streak
– This was due to tightening supplies and expectations of OPEC+ extending output cuts
– US West Texas Intermediate crude (WTI) rose 1% to $84.45 a barrel, while Brent crude rose 0.9% to $87.65 a barrel
– Analysts expect Saudi Arabia to extend a voluntary oil production cut of 1 million barrels a day into October
– Russia, the world’s second largest oil exporter, has also agreed to cut oil exports
– US crude inventories fell by a more-than-expected 10.6 million barrels last week
– Changes in US inventories are often seen as a proxy for changes in the global production-consumption balance
– Signs of stronger demand were seen in the product market, with implied gasoline demand increasing
– A weaker US dollar, which is set to end a six-week winning streak, also helped boost prices
– Chinese factory activity returning to expansion and moves by Beijing to support the housing market also boosted oil prices

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