ISLAMABAD
Crude oil prices inched up as market participants were awaiting industry data later on Tuesday that is expected to show US crude oil stockpiles and product inventories fell last week.
As of 1130 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, gained $0.32 (+0.41 percent) to reach $78.82 a barrel. The West Texas Intermediate (WTI), the main oil benchmark for North America, went up by $0.37 (+0.50 percent) to $74.52 a barrel.
However, the price of Russian Sokol decreased by $2.08 (-2.89 percent) to $69.88. Arab Light prices witnessed a decrease of $2.04 (-2.43 percent) to reach $81.91 a barrel. On the other hand, the price for Opec Basket increased by $0.90 (+1.12 percent) to $81.53. The OPEC Reference Basket of Crudes (ORB) is made up of Saharan Blend, Girassol, Djeno, Zafiro, Rabi Light, Iran Heavy, Basra Light, Kuwait Export, Es Sider, Bonny Light, Arab Light, Murban and Merey.
Oil markets have enjoyed a sustained rally over the past three weeks, with oil prices briefly moving above $80 per barrel for the first time in two months ostensibly thanks to rising demand and OPEC+ supply cuts finally causing global markets to tighten.
Whether or not the oil price rally has any legs, however, remains to be seen with supply tightness in global oil markets being challenged by growing production from the likes of Iran and Venezuela as well as record production by the US Shale Patch.
For the second month running, the leading OPEC producer, Saudi Arabia, has extended its voluntary 1M bbl/day oil production cut for another month, this time till August. The reduction will take the country’s production to ~9M bbl/day, the lowest level in several years. Saudi has been single-handedly sacrificing sales volume in bid to goose weak oil prices, but has so far reaped little reward. However, oil traders remain unconvinced that the cuts will have the desired effect over the long-term, saying the gains are likely to be short-lived.
