Reuters reports that oil prices are rising as a result of planned production cuts by some of the world’s largest oil producers, while there is hope that rising demand in developing countries can offset global economic concerns.

A barrel of the European reference oil, Brent, costs USD 79.44 on Wednesday morning, compared to USD 79.12 on Tuesday afternoon. At the same time, US WTI oil is trading at USD 74.89 compared to USD 74.54 on Tuesday afternoon.

”Crude oil prices are getting a boost on expectations that the market will remain tight despite persistent growth concerns,” writes Oanda senior analyst Edward Moya in a note.

Last week, Saudi Arabia announced plans for a further production cut of 1 million barrels per day, while Russia announced an export cut of 500,000 barrels per day.

The US Department of Energy (EIA) said on Tuesday that oil demand will exceed supply by 100,000 barrels per day in 2023 and 200,000 barrels per day in 2024.

The oil market should remain tight in the second half of 2023, the EIA said, citing high demand from China and developing countries combined with recently announced supply cuts from Saudi Arabia and Russia, among others.

”The short-term outlook for oil demand shouldn’t be too bad since everyone is going on vacation this summer, which requires some form of transportation,” Moya adds.

According to the industry organization American Petroleum Institute (API), US crude oil inventories rose by 3 million barrels last week. Analysts polled by Reuters expected an increase of 500,000 barrels.

Later on Wednesday, US inflation figures will be published, which may give an idea of future interest rate hikes.

In the rest of the commodities market, a troy ounce of gold on Wednesday morning cost USD 1,938.18 compared to USD 1,931.86 on Tuesday afternoon.

(Translated using DeepL with additional editing by Christian Radich Hoffman)