Small increase in oil prices on expected drop in US crude inventories

Crude oil prices are slightly rising on Thursday morning on the back of production cuts and expectations of falling inventories in the US.
Photo: Jacob Ehrbahn
Photo: Jacob Ehrbahn

Oil prices rise slightly on Thursday morning as new industry figures are expected to reveal falling crude inventories in the US last week.

Combined with Saudi Arabia and Russia’s recently announced extension of their voluntary production cuts until the end of the year, this is helping to tighten global supply and thus raise prices, according to news agency Reuters.

A barrel of the European reference oil, Brent, costs USD 90.41 on Thursday morning, compared to USD 89.47 on Wednesday afternoon. At the same time, US West Texas Intermediate (WTI) oil is trading at 87.28 dollars compared to 86.31 dollars on Wednesday afternoon.

The price of Brent has crossed the 90 dollar threshold again on Thursday morning, which it did for the first time on Tuesday since November 2022 as a result of Saudi Arabia’s and Russia’s cuts.

The Saudi cuts amount to 1 million barrels per day, while Russia’s totals 300,000. Both production cuts come on top of the already agreed cuts in the Organization of the Petroleum Exporting Countries and their allies, OPEC+, which were adopted in April and are expected to continue until the end of 2024.

According to Reuters, Russia and Saudi Arabia will continuously assess market conditions and make monthly decisions on whether to increase or decrease supply tightening.

Later on Thursday, commodity market traders will be watching for official inventory figures from the US Department of Energy, which are expected to be released at 5 p.m. CET. According to Reuters, market sources expect US crude inventories to fall by 5.5 million barrels last week.

(Translated using DeepL with additional editing by Kristoffer Grønbæk)

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