• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 3 days "What’s In Store For Europe In 2023?" By the CIA (aka RFE/RL as a ruse to deceive readers)
  • 8 days America should go after China but it should be done in a wise way.
  • 1 day Even Shell Agrees with Climate Change!
  • 3 days How Far Have We Really Gotten With Alternative Energy
  • 4 days The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.
  • 3 days World could get rid of Putin and Russia but nobody is bold enough
  • 6 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
The Renewable Revolution’s $3 Trillion Problem

The Renewable Revolution’s $3 Trillion Problem

Renewable energy developments are advancing…

Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

Oil Prices Fall Back After A Short-Lived OPEC+ Rally

  • Oil prices rallied on Sunday and Monday following Saudi Arabia’s decision to cut production by a further 1 million barrels per day.
  • By Tuesday morning, both WTI and Brent were falling back, with economic concerns outweighing the impact of further OPEC+ cuts.
  • U.S. and Chinese manufacturing data has disappointed so far this year, although driving season has the potential to boost the oil demand outlook.

This Monday saw what was perhaps one of the shortest oil price rallies following an OPEC+ meeting.

The announcement of an additional production cut of around 800,000 bpd by the oil-producing group pushed Brent crude and West Texas Intermediate slightly higher during the day but by Tuesday morning the momentum had fizzled out and both key benchmarks were down.

At the time of writing, Brent crude was trading at $76.52 per barrel, with West Texas Intermediate at $71.93 per barrel, both down, although by less than half a percentage point from yesterday. During the Monday session, Brent crude added some $2.60 per barrel and WTI jumped by over $3 per barrel.

It appears that traders are unconvinced about the importance of any further cuts from OPEC+ as worry about the state of the global economy prevails. On Sunday, Saudi Arabia announced that it would implement voluntary cuts of 1 million bpd but the UAE was allowed to raise its output by about 200,000 bpd.

"Supply side issues took centre stage following OPEC’s production cuts. However, the gains were limited amid ongoing concerns over the economic backdrop," analysts from ANZ said in a note cited by Reuters earlier today.

On the other hand, "the U.S. economy is about to show a very robust summer travel season that should mean gasoline and jet fuel demand is going to be very strong," according to Edward Moya from OANDA, also cited by Reuters.

According to U.S. manufacturing sector data, the industry has been shrinking for seven months in a row, which fits in with the definition of a recession, which has dampened demand for fuels and reinforced a bearish sentiment among oil traders.

On the other hand, summer driving season is peak demand season and with prices at the pump much lower than they were this time last year, it could live up to its name, possibly changing traders’ sentiment.

By Irina Slav for Oilprice.com


More Top Reads From Oilprice.com:

Download The Free Oilprice App Today

Back to homepage

Leave a comment
  • Mamdouh Salameh on June 06 2023 said:
    That is because the decline in prices over the last three months has nothing to do with the fundamentals of the market which remain robust and everything to do with persistent fears of a banking or financial crisis triggered by a shaky US banking system.

    In such circumstances making new cuts would have been barrels down the drain.

    Only when these fears disappear altogether from the market will we see prices recover their losses and surge towards $90-$100.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News