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Irina Slav

Irina Slav

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

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Oil Prices Retreat On Mixed Messages From OPEC+

  • Oil prices were down slightly on Friday morning, with WTI trading at $71.70 and Brent trading at $76.03.
  • Oil prices had jumped earlier in the week after Saudi Arabia’s Energy Minister threatened short-sellers and boosted expectations of an OPEC+ cut.
  • Russia’s Deputy Prime Minister then countered that message by predicting that Brent would be trading just slightly above $80 by year's end.

Crude oil began trade on Friday with a slight decline as traders weighted mixed messages from the two biggest members of OPEC+.

Earlier in the week, prices jumped following comments made by the Saudi Energy Minister that suggested the group may announce further production cuts at its next meeting in early June.

"Speculators, like in any market they are there to stay, I keep advising them that they will be ouching, they did ouch in April, I don't have to show my cards I'm not a poker player... but I would just tell them watch out," Abdulaziz bin Salman said on Tuesday.

Two days later, however, his Russian counterpart within the OPEC+ context, Deputy Prime Minister Alexander Novak, came out with a different message.

Speaking to Russian media, Novak said he did not expect any change in policies at the next OPEC+ meeting, noting that U.S. debt ceiling uncertainties and a slower-than-expected recovery in demand from China were pressuring prices.

Still, Novak said, he expected Brent crude to rebound above $80 per barrel by the end of the year.

Oil prices have shed some 10% since the start of the year, with the decline being mainly attributed to the slower-than-expected post-pandemic recovery of China.

Some upward pressure for prices at the end of the week could come from the news that President Biden and House Speaker McCarthy are nearing a deal on the debt ceiling, which would enable the federal government to avoid imminent debt default.

According to an unnamed official who spoke to Reuters, the deal would raise the ceiling for two years and put caps on most government spending—something that Republicans have insisted on while Democrats wanted a higher debt ceiling with no conditions.

Thanks to that upward pressure, both Brent crude and West Texas Intermediate could end this week’s trade with gains, albeit quite modest ones.

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By Irina Slav for Oilprice.com


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Leave a comment
  • Mamdouh Salameh on May 26 2023 said:
    Both Russian Deputy Prime Minister Alexander Novak and Saudi Energy Minister Prince Mohammed bin Salman are reading from the same hymn sheet. Their message is very simple and their objective is to keep the global oil market balanced.

    They both realize, however, that OPEC+ doesn’t see the need to cut production since the current weakness in oil prices has nothing whatsoever to do with the fundamentals of the global oil market and overwhelmingly everything to do with persistent fears of a global banking or financial crisis triggered by a shaky US banking system and weak data about the US economy.
    They also realize that cutting production in such circumstances would prove futile.

    Only when these fears subside or disappear altogether will pressure on oil prices eases thus enabling prices to recoup all their recent losses and resume their surge.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

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