The price of oil continues to rise / the decrease in US oil reserves is the new increasing factor

According to the report of the International Economic Group of Fars News Agency, quoted by Reuters, following the strengthening of expectations for the reduction of US oil reserves, as well as the new decision of OPEC+ to further reduce production, the price of oil increased in trading today.

Brent oil rose 30 cents to $85.24 per barrel, and US crude oil rose 18 cents to $80.89 per barrel.

This increase took place after the release of the American Petroleum Institute’s statistics on the oil production of the United States. This statistic showed that the country’s crude oil reserves decreased by 4.3 million barrels in the week ending March 31.

Official statistics will be released this afternoon by the US Energy Information Administration.

Another factor that keeps oil prices rising is OPEC+’s decision to further reduce the production of this group.

Both oil indices were up more than 6 percent in Monday’s trading after the Organization of the Petroleum Exporting Countries, OPEC and its allies such as Russia, known as OPEC+, announced that they plan to cut production by a further 1.6 million barrels per day. They recorded price growth.

The new plan brings OPEC+’s total output cuts to 3.66 million barrels per day, including the group’s decision to cut production by 2 million barrels per day in October. This figure is approximately equivalent to 3.7% of the demand in the world. The group announced that this new reduction will be implemented from May this year.

OPEC+, on October 5, 2022, in the 33rd meeting of the ministers of this group, decided to reduce their production by 2 million barrels per day and maintain this process until the end of 2023, which they have now increased.

“Energy traders are still processing and digesting the surprise OPEC+ production cut, and any news of supply cuts in the market will push prices higher,” said Edward Moya, an oil market analyst.

On the other hand, economic statistics in Asia show that Japan’s service sector grew at the fastest pace in the last 9 years in March.

However, weak production activities in the US and China, the two biggest oil consumers, have prevented oil prices from rising further despite OPEC’s production cut plan leaving the market with little supply.

Traders will look for clues about the US economy’s outlook through non-farm payrolls data this weekend, analysts said.

CMC market analyst Tina Teng says: “The US non-farm payrolls are the most influential economic statistics that determine the market’s movement.”

This is while the big banks in the world are predicting one after the other that with this decision of OPEC, the price of oil will rise sharply. In this regard, Goldman Sachs Bank announced that OPEC+ production cuts could create a more significant deficit in the market and bring oil prices to $100 per barrel by April 2024.

Barclays Bank was another bank that increased its forecast by $5 and announced the estimated price of crude oil at $92 per barrel.

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