Quotes of Brent crude on the morning of June 3 grew by more than $ 40 per barrel, but did not stay at this level. As of 18:46 Kiev time, quotations dropped to $ 39 15 cents per barrel. The growth was recorded after the report of the American Petroleum Institute, commercial oil reserves in the US last week fell by 483 thousand barrels.
Subsequently, the official US Department of Energy on the reserves of raw materials in the country, even more optimistic for oil exporters, came out, but the market already reacted to the new information. Traders took into account the irritation of Saudi Arabia that Iraq and Nigeria, according to Riyadh, are not fulfilling their obligations under the OPEC + agreement. If these countries do not cut production, the deal may end in a month, from July 1.
Two factors are currently positively affecting the oil market. This is a gradual reduction of the restrictions associated with the COVID-19 pandemic and the revitalization of economic activity in most developed countries of the world, as well as the implementation of agreements on production cuts reached by the Organization of the Petroleum Exporting Countries (OPEC) and the cartel’s partner countries, including Russia, Kazakhstan and others. … The OPEC + parties first agreed to cut oil production by a record 9.7 million barrels in May-June to offset the drop in global demand caused by the pandemic.
Saudi Arabia and its Middle East allies, which voluntarily went for even deeper production cuts than provided for by the terms of the agreement, now advocate maintaining production quotas at current levels for an additional one to three months, Bloomberg reports citing an informed source … Oil prices closed higher for five consecutive weeks.