S&P Global: Oil prices rising in the coming months
A pumping jack pumps oil from an oil field near Lovington, New Mexico. Lovington/AP News
Oil prices rose on news of Saudi Arabia’s voluntary production cuts.
On the 5th (local time) at the New York Mercantile Exchange (NYMEX), West Texas Intermediate (WTI) for July contracts closed at $72.15 per barrel, up $0.41 (0.57%) from the previous trading day. On the London ICE Futures Exchange, August Brent crude oil rose 0.29 dollars (0.38%) to 76.42 dollars per barrel.
According to CNBC, the Organization of Petroleum Exporting Countries (OPEC) and OPEC Plus (+), a consultative body of other oil-producing countries, decided to maintain their plan to cut production within the year at a meeting held the previous day. OPEC+ had announced that it would cut production by an additional 1.66 million barrels per day by the end of April. At that time, 500,000 barrels of production cuts were for Saudi Arabia.
However, Saudi Arabia announced a voluntary additional production cut of 1 million barrels per day in July. “The total voluntary production cuts for the month of July will be 1.5 million barrels per day,” the Saudi Energy Ministry said in a statement. .
As OPEC+ supplies 40% of the world‘s crude oil, their policy decisions inevitably have a significant impact on oil prices.
“The market did not expect Saudi Arabia’s unilateral decision to cut production by 1 million barrels,” said Bob McNally, analyst at Rapiden Energy. It has once again shown that it is willing to act as a person.” He added, “I expect oil prices to exceed $100 per barrel next year.”
Kang Wu, an analyst at S&P Global Commodity Insights, said: “Global demand for oil will increase significantly this summer, which will lead to depletion of inventories, which will support oil prices in the coming months.”