Crude oil remains stable in early trade

4 Jul 2023 , 09:16 AM

Tuesday’s oil price stability was due to markets balancing supply issues brought on by cuts for August by major exporters Saudi Arabia and Russia with economic data that suggested poor petroleum demand.

Brent crude futures were up 22 cents, or 0.3%, at $74.87 per barrel. American West Texas Intermediate crude was up 27 cents, or 0.3%, to $70.06.

Tuesday will be a trading holiday in the United States due to the nation’s Independence Day holiday. The benchmark prices for oil had decreased by nearly 1% the previous session.

According to the country’s official news agency, Saudi Arabia said on Monday that it would extend its voluntary production cut of one million barrels per day (bpd) through August. According to Deputy Prime Minister Alexander Novak, Russia will also decrease its oil shipments by 500,000 bpd in August.

As Riyadh and Moscow attempt to support prices, the cuts, which account for 1.5% of the world supply, raise the total amount agreed by OPEC+ oil producers to 5.16 million bpd. Members of the Organisation of the Petroleum Exporting Countries (OPEC) and their allies make up OPEC+.

For the third consecutive week, U.S. crude stocks were predicted to decrease by around 1.8 million barrels in the week ending June 30. Due to the U.S. vacation, government data on inventories will be released on Thursday and industry data on Wednesday.

However, after business surveys revealed a decline in global factory activity due to weak demand in China and Europe, markets continued to worry about the need for oil.

Manufacturing in the United States decreased even further in June, reaching lows last seen during the COVID-19 pandemic’s first wave.

According to a Reuters survey conducted last week, this year’s gains in oil prices caused by a recovery in China or OPEC+ cuts will be hindered by the global economic downturn.

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