Oil prices recover after falling to lowest levels in six months

OPEC+ continues to reduce its production
Oil prices recover after falling to lowest levels in six months
US oil inventories fell by 4.6 million barrels over the past week

Oil prices rose during Thursday’s trading, despite data showing a decline in Chinese imports of crude in November. Moreover, US crude inventories recorded a decline over the past week.

Oil prices

Standard Brent crude futures prices for the most active February delivery rose by 0.35 percent reaching $74.56 per barrel at 9:05 a.m. Mecca time.

US Nymex crude futures prices for the January delivery increased by 0.36 percent reaching $69.63 per barrel. They compensated for some of the last session’s losses, which amounted to approximately 4 percent.

Beijing imports

Data from the General Administration of Customs of the People’s Republic of China, issued today, showed that Beijing’s imports of crude oil declined annually by 9.2 percent to 42.445 million metric tons in November. Meanwhile, the average daily rate of imports reached 10.33 million barrels in November, which is the lowest daily rate since last July.

US oil stocks

United States oil inventories fell by 4.6 million barrels last week, compared to the expected decline of 1.3 million barrels. Whereas, gasoline inventories increased by 5.4 million barrels during the same period, according to US Energy Information Administration data released yesterday.

Oil prices regained some momentum today, after falling to their lowest levels in six months in the last session. However, investors are still concerned about the declining demand and the economic slowdown in the United States and China.

OPEC production cuts

The results of a survey conducted by Reuters showed that the oil production of the Organization of the Petroleum Exporting Countries (OPEC) decreased last November, which is the first monthly decline since July.

According to the survey, production declined due to lower shipments from Nigeria and Iraq.  Additionally, Saudi Arabia and other OPEC+ members continued cuts in an effort to support the market.

Moreover, the survey revealed, on Wednesday, that OPEC pumped 27.81 million barrels per day, a decrease of 90 thousand barrels per day compared to October.

That is compared to an increase in production in the three months until last October.

Read: Gold retreating from peaks but holding above $2,000

Agreement on voluntary cuts

Minister of Energy of Saudi Arabia, Prince Abdulaziz bin Salman Al Saud, said in statements to Bloomberg on Monday that OPEC+ oil production cuts could certainly continue after the first quarter of 2024 if necessary.

The minister confirmed that the production cuts announced last week will be fully adhered to, noting that approximately half of them come from Saudi Arabia.

The major oil producers in OPEC+ agreed last Thursday to voluntary production cuts totaling about 2.2 million barrels per day in the first quarter of next year.

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