BENGALURU: Oil prices rose on Tuesday on a tighter gasoline market outlook and a warning from the Saudi energy minister to speculators that raised the prospect of further OPEC+ cuts to support the market.
Brent crude was up $1.14, or 1.5%, at $77.13 a barrel by 11:33 a.m. EDT (1533 GMT). US West Texas Intermediate (WTI) crude gained $1.21, or 1.7%, to $73.26 a barrel.
Those gains add to a 1% rise in the previous session, when a surge in US gasoline futures lifted optimism for crude demand.
Gasoline futures rose another 1% on Tuesday, with analysts expecting a third straight weekly decline in inventories just ahead of the Memorial Day holiday on May 29, which kicks off the peak summer demand season.
The first of the week’s two US inventory reports, from the American Petroleum Institute, due at 4:30 p.m. EDT (2030 GMT) . The US Energy Information Administration reports official data on Wednesday.
Production cuts by some OPEC+ members take effect this month, which should squeeze supplies further.
Comments from Saudi Arabia’s energy minister raised speculation the Organization of Petroleum Exporting Countries and allies including Russia may remove even more supply.
Saudi Arabia’s energy minister said he would keep short sellers - those betting that prices will fall - “ouching” and told them to “watch out”. The comments could mean OPEC+ will consider further output cuts when it meets on June 4, said OANDA analyst Craig Erlam. But he added that Brent crude prices need to rise above $77.50 a barrel to signal a sentiment shift.
“Of course, actions speak louder than words and traders haven’t been overly deterred by his words, despite the group having announced two sizeable cuts in the last year that briefly shook the markets,” Erlam said.
White House and congressional Republican negotiators will meet again on Tuesday to resolve a impasse over raising the $31.4 trillion US debt limit, with Washington facing risk of default in as little as nine days.
Comments
Comments are closed.