According to expert RIYADH, the last two trading days may have seen oversold oil markets. Oil prices held steady on Thursday as news of swelling stocks in the largest oil consumer in the world overshadowed probable pauses in US interest rate hikes and the passage of a critical US debt ceiling bill.
The likelihood of avoiding a devastating default increased on Wednesday when US Federal Reserve officials hinted interest rates may be held steady this month and the US House of Representatives enacted a bill suspending the government’s debt ceiling.
By 13:39 GMT, Brent crude futures had decreased by 10 cents, or 0.14 percent, to $72.50 per barrel, while US West Texas Intermediate crude had increased by 7 cents, or 0.1%, to $68.16. On both Tuesday and Wednesday, the benchmarks declined.
According to CMC Markets analyst Tina Teng, “Oil markets may have been oversold in the last two trading days.” After the House passed the debt package and the Fed signalled a pause in rate hikes, sentiment improved.
HIGHLIGHTS On Wednesday, market sources cited data from the American Petroleum Institute to report that US oil stockpiles increased by around 5.2 million barrels.
By 13:39 GMT, the price of US West Texas Intermediate crude had risen by 7 cents, or 0.1 percent, to $68.16 while Brent crude futures had dropped by 10 cents, or 0.14 percent, to $72.50 a barrel.
China, the largest oil importer in the world, has given mixed signals about its demand, and industry statistics suggesting an increase in US crude inventories have also weighed on the market.
On Wednesday, market sources cited data from the American Petroleum Institute to report that US oil stocks increased by roughly 5.2 million barrels the previous week.
Pessimism permeates the atmosphere right now, according to oil dealer PVM’s Tamas Varga. “Investors have recently been pragmatists and risk-averse.”
The Organisation of the Petroleum Exporting Countries and its allies, including Russia, will consider whether or not to limit oil production further at the OPEC+ producer group meeting on June 4.
The average price of Brent crude for this year has been reduced by British multinational bank Barclays from $92 to $87 per barrel. The bank reduced its projection for Brent’s price for 2024 as well, down the average predicted price from $97 per barrel to just $87.
China-based business in Brazil
Brazil’s Buzios5 well production has started, according to a statement released by China’s CNOOC Ltd. on Thursday.
Off the southeast coast of Brazil, the well is the fifth phase of the Buzios oil field. The field is the largest deep-water pre-salt oil field in the world, producing 600,000 barrels per day at an average sea depth of 1,900 to 2,200 metres, according to the business.
The Buzios shared reservoir is 88.99 percent held by Petrobras, the government-owned oil and gas firm of Brazil, and is 7.34 percent controlled by CNOOC’s Brazilian affiliate. Last year, CNOOC paid Petrobras $1.9 billion to obtain a 5% ownership in a production-sharing deal at the field.