Jakarta, CNBC Indonesia – World crude oil prices closed higher on Friday (10/11/2023) after Iraq supported OPEC+ oil cuts.
The price of WTI crude oil closed up 1.89% at US$77.17 per barrel, as did Brent crude oil which closed up 1.77% to US$81.43 per barrel.
However, within a week oil prices were still corrected, the price of WTI crude oil fell 4.15%, as did Brent crude oil down 4.08%.
Oil prices rose nearly 2% in Friday trading as Iraq voiced support for OPEC+ oil cuts ahead of its two-week meeting and as some speculators covered massive short positions ahead of the weekend of uncertainty.
However, prices still weakened in the week by 4%, and became the third weekly decline in a row.
Price Futures Group analyst Phil Flynn noted that in addition to comments from Iraq, Saudi Arabia and Russia confirmed this week they would continue oil production cuts through the end of the year.
From the United States (US), energy companies cut the number of oil rigs operating for two weeks in a row to the lowest level since January 2022, according to energy services company Baker Hughes. The rig count indicates future production.
“Concerns about oil demand have replaced fears of production cuts related to the Middle East conflict,” according to analysts at Commerzbank.
Then weak Chinese economic data this week raised concerns about weakening demand. Refiners in China, the biggest buyer of crude from Saudi Arabia, the world’s biggest exporter, asked for supply cuts for December.
US consumer sentiment fell for the fourth straight month in November and household expectations of inflation rose again.
President of the US Federal Reserve (The Fed) Bank in San Francisco Mary Daly said she was not ready to say whether the Fed was done raising interest rates, echoing comments by Fed Chair Jerome Powell on Thursday.
Higher interest rates can reduce oil demand by slowing economic growth.
In Britain, the stagnant economy failed to grow in the July to September period but managed to avoid recession, according to Britain’s Office for National Statistics.
Meanwhile, OPEC+, the Organization of the Petroleum Exporting Countries and its allies including Russia, will meet on November 26.
Iraq’s Oil Ministry said Baghdad was committed to the OPEC+ agreement in determining production levels.
The likelihood that Saudi Arabia will extend its production cuts into the first quarter of 2024 is “certainly increasing, given renewed market concerns about Chinese demand and the broader macro outlook,” said RBC Capital Markets analyst Helima Croft.
Analysts at Capital Economics said OPEC+ may reduce supply further if prices continue to fall.
“We stand by our forecast that Brent oil prices will end this year and next at around US$85 per barrel,” the research firm said in a note.
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(saw/saw)
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2023-11-12 04:30:00
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