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Investing.com — Oil prices traded higher on Tuesday as the decision by a series of leading producers to cut supply boosted sentiment, overshadowing concerns about slowing manufacturing activity.
Around 9:10 p.m., the traded up 1% to $70.47 a barrel, while the contract rose 0.9% to $75.31 a barrel.
Major exporters cut supplies
Saudi Arabia announced on Monday it would extend its voluntary 1 million barrels per day cut in August, Russia agreed to cut oil exports by 500,000 barrels per day in August, while the Algeria contributed to a more modest reduction of 20,000 barrels per day.
The news had limited impact on Monday, but tended to floor oil prices, boosting sentiment even as data showed deteriorating manufacturing activity in China, the United States and much of the world. part of Europe.
“The Saudi cut was widely expected and, in fact, not rolling it forward would have put further downward pressure on the market. The Saudis therefore find themselves in a difficult situation for the next few months, as they will have to be careful how which they are reducing supply in the current environment,” ING (AS:) analysts said in a note.
“Although Russia’s announcement came as a surprise, the market will wonder whether Russia will actually make the cuts or not. Their results this year have not been great.” added ING.
The holiday in the United States limits exchanges
The Independence Day holiday in the United States will limit trading activity on Tuesday as traders await additional data to assess the health of the U.S. economy, the world’s biggest consumer.
The Fed’s June meeting is due on Wednesday, and traders will be looking for clues after the central bank kept interest rates on hold last month but signaled at least two more hikes this month. year.
Friday will also be released for the month of June, which should also influence the plans for interest rates.
Non-political OPEC meeting in focus
The Saudi and Russian supply cuts come ahead of a conference this week organized by the Organization of the Petroleum Exporting Countries (OPEC) and its allies.
Leaders of the world’s major oil companies are expected to meet energy ministers from OPEC member states on Wednesday and Thursday, which could provide further guidance to oil markets.
That said, as this is a non-political meeting, an announcement on future supply levels is unlikely to be made.
2023-07-04 09:04:00
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