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ShreeMetalPrices: Oil price remains stable on strong demand data despite economic worries

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Oil prices rise on Monday as worries about fuel consumption in the top two oil users in the world, China & US, outweighed bullish mood regarding tighter supply from OPEC+ cutbacks and a resumed U.S. purchasing for reserves.

By 1630 IST, Brent crude futures were up 25 cents, or 0.34 percent, to 74.42 dollar per barrel. While the United States West Texas Medium crude was up 29 cents, or 0.41 percent, to 70.33 dollar per barrel.

In the previous week, both benchmarks experienced their longest run of weekly drops since Sept 2022, falling for a fourth straight week. The reason for this was worries that the US could experience a recession due to the “important risk” of a historical defaults within the first 2 weeks of June.

The United States dollar gained strength as a result of investors looking for safe havens, increasing the cost of commodity denominated in other currencies for investors of other currencies. [FRX/]

According to Shree Metal Prices Markets analyst, “oil prices are still in threat from weak demand perspectives as the Chinese economic reopening growth seems bumpy,” noting that market concerns have also been brought on by the United States banking crisis.

In the coming week, investors will look for signs of growth in oil demand in China’s flow of economic statistics on industry production, fixed asset investment, and retail sales, they added.

Stron Oil Demand

According to IG analyst Tony Sycamore, “market opinion regarding crude oil will continue tepid at best with the uneven re-opening in China & worries that the United States is experiencing a growth deceleration at a time when the X-date for the loans ceiling is quickly getting closer, topped off by a rise in the the United States dollar.”

Nevertheless, as OPEC+, & its partners, including Russia, continue to cut production. Sour crude supply may become more scarce globally in the 2nd half.

However, according to Iraq’s oil minister, Hayan Abdel-Ghani, the group’s next meeting in June is not expect to result in further limits to oil production.

After completing a sale required by Congress in June, the United States could begin repurchases oil for the SPR, Energy Secretary Jennifer Granholm informed legislators on Thursday.

Following this news, energy services company Baker Hughes Co. released its weekly report, which revealed that the number of the United States oil rigs decreased by 2 this week to 586, its weakest level since June 2022, while the numbers of gas rigs dropped by 16 to 141.

According to sources with direct knowledge of the deliberations, the heads Seven (G7) countries may unveil fresh measures at their meetings from May 19 to 21 that target third-country sanctions evasion.

According to the sources, the sanctions’ strengthening will also aim to impede Russia’s future energy output and reduce trade that benefits its armed forces.

Since the EU sanctions began in December, China and India, the world’s No. 3 & No. 1 crude oil importers, have been the main consumers of Russian crude.

SHREE METAL PRICES