Oil prices closed higher on Friday as markets looked skeptical about whether the extra output decided by OPEC + on Thursday could offset supply from Russia and meet growing demand from China. by relaxing the restrictions on coronavirus.
At the same time, President Joe Biden said on Friday that he did not “immediately plan” (within a month) to travel to Saudi Arabia. The New York Times reported on Thursday that Biden had decided to travel to Saudi Arabia in the coming weeks to re-establish ties with the kingdom, which he once vowed to turn into an “outcast” in response to the assassination of journalist Jamal Kasogi. Biden would be expected to push Riyadh to increase oil production so that high energy prices fall.
OPEC + ‘s decision on Thursday to increase production by 648,000 barrels per day in July and August to 432,000 barrels per day, as previously agreed, is hardly enough for a tight market.
The increases were distributed proportionally between Member States, but with Russia included in the pact and members such as Angola and Nigeria already having failed to meet their targets, analysts estimate that supply growth is likely to be less than the one that was announced.
Russian production has already fallen by 1 million barrels since the invasion of Ukraine, and is likely to fall further as the EU ban on Russian oil takes effect.
“Markets have judged OPEC + ‘s moves and clearly believe that they will not have a significant impact on the global supply / demand balance,” said Jeffrey Halley of OANDA.
At the same time, the weekly report in the US showed that the country’s stocks fell more than expected by 5.1 million barrels, as well as gasoline, emphasizing how tight the market remains.
At the same time, China has eased restrictions on the spread of the coronavirus in Shanghai and Beijing, which is expected to further boost global demand.
In this climate, the slow press WTI July delivery strengthened by 1.7% or $ 2 to 118.87 a barrel, while in the week it recorded gains of 3.3%.
Oil type Brent delivery in August was up 1.8%, or $ 2.11, at $ 119.72 a barrel, up 3.6% on the week.
At a record level, the petrol July delivery, which gained 1.5% to $ 4.2522 a gallon. In the week, it jumped 8.7%.
Source: Capital
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