Mumbai, 7 Jun (Commoditiescontrol): Crude oil prices edged higher on Friday, buoyed by signals from OPEC+ heavyweights Saudi Arabia and Russia about potential changes to output agreements, alongside a recent interest rate cut by the European Central Bank (ECB) that has raised expectations of a similar move by the U.S. Federal Reserve.
Brent crude futures saw a modest increase of 16 cents, or 0.2%, bringing the price to $80.03 per barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude futures also climbed by 16 cents, or 0.2%, reaching $75.71 per barrel. This upward trend follows a Thursday rally triggered by Saudi Arabia and Russia's attempts to calm market concerns over supply stability.
Despite these gains, oil prices are on track for a weekly loss. Analysts interpreted Sunday's OPEC+ meeting as a sign of potential supply increases, which typically exerts downward pressure on prices. OPEC+, comprising the Organization of the Petroleum Exporting Countries and allies like Russia, decided to extend most production cuts into 2025. However, they also allowed for a gradual easing of voluntary cuts by eight member countries, contributing to market apprehensions about future supply levels.
Adding to the market dynamics, the ECB's decision to implement its first interest rate cut since 2019 has stirred speculation that the U.S. Federal Reserve might follow suit. Lower interest rates generally boost oil demand by making borrowing cheaper, thereby stimulating economic activity.
Looking ahead, traders and analysts are keenly awaiting the release of Chinese commodity trade data. As the world's second-largest oil consumer, China's demand trends are crucial for global oil markets. ANZ Research analysts highlighted in a client note that the forthcoming data could provide valuable insights into the direction of oil demand in China.
Overall, the oil market remains finely balanced, with price movements sensitive to both supply-side decisions by OPEC+ and broader economic signals such as central bank interest rate policies. As market participants digest these developments, the focus will remain on forthcoming economic data and policy announcements that could further influence oil prices.
(By Commoditiescontrol Bureau: 09820130172)
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