Oil prices come down

13 May 2024 , 10:30 AM

Oil prices came down on Monday due to concerns regarding slowdown in demand. Brent crude prices were down 26 cents, or 0.3%, to $82.53 per barrel, while U.S. West Texas Intermediate crude futures were down 23 cents, or 0.3%, to $78.03 per barrel.

On Friday, both benchmarks saw a $1 decrease in closing prices as Fed members disagreed on whether US interest rates are high enough to return inflation to 2%.

Analysts predict that the US central bank will maintain the dollar’s strength by holding its policy rate at its current level for an extended period of time. For investors holding other currencies, dollar-denominated oil becomes more expensive due to a strong dollar.

Global refiners are facing declining profits from diesel as new facilities increase supply, mild weather in the northern hemisphere reduces demand, and slow economic growth eats into profits.

Even yet, the market continued to be buoyed by hopes that production curbs from OPEC+—the Organisation of the Petroleum Exporting Countries and their allies—may be extended into the second half of the year.

According to Iraq’s oil minister, who spoke to the state news agency on Sunday, the organisation is dedicated to the voluntary reductions in oil production that have been agreed upon by members and is eager to work with other nations to increase market stability. Iraq is the second-largest producer of oil within OPEC.

The minister made the remark on Saturday that Iraq had already made sufficient voluntary reductions and would not accept any more when the larger OPEC+ producing group met in early June.

OPEC+ criticised Iraq earlier this month for exceeding its output quota in the first three months of 2024 by a total of 602,000 barrels per day. Baghdad, the organisation added, has committed to make up for the loss with further production cuts for the remainder of the year.

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