Oil Ticks Up as Russia’s Novak Says No More OPEC+ Cuts Needed

Crude oil prices ticked higher on Thursday, stabilizing after Wednesday's drop due to sentiments that the OPEC+ late March production cut announcement had already been priced in for the next month, when they go into force. 

On Thursday at 1:41 p.m. EST, Brent crude was trading at $78.53, up 1.08% for a 84-cent gain on the day, but still well below the $80 resistance mark. West Texas Intermediate (WTI) was trading at $75.11 per barrel, up 1.09% for a 81-cent gain on the day.

On Wednesday, oil prices shed nearly 4% despite a surprisingly large drawdown in U.S. crude inventory stockpiles as fears of lagging economic data in the U.S. drove sentiment.

The slight upward swing follows a statement on Thursday by Russian Deputy Prime Minister Alexander Novak to the effect that the oil markets were balanced. Novak said given the state of the balance, more OPEC+ cuts would not likely be necessary.

Despite lower-than-expected Chinese demand, Novak said OPEC+ did not see the need to expand production cuts at this time.

Novak also confirmed that Russia had reached its targeted output cuts for the month of April of 500,000 barrels per day, or 5% of total output. Those cuts will remain in force until the end of this year.

The small uptick in prices reflects continued market jitters over the U.S. economy, with new data released on Thursday showing that U.S. GDP grew by 1.1% for the three months ending in March. That figure represents a slowdown from 2.6% growth in the fourth quarter of 2022 and 3.2% in the third-quarter of last year. It was a mixed bag, however, with consumer spending soaring for the three months ending in March, ABC News reports. 

By Tom Kool for Oilprice.com

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