WTI halts losing streak after Saudi Arabia raises Oil prices for June
- WTI price gained ground after Saudi Arabia increased the Official Selling Prices (OSPs) for Oil sold to most regions.
- OPEC+ producers are prepared to prolong voluntary output cuts of 2.2 million barrels per day beyond June.
- Oil prices edged up due to concerns about the potential failure of a Gaza ceasefire deal.
West Texas Intermediate (WTI) crude Oil price snaps its losing streak, trading around $78.20 per barrel during the Asian session on Monday. Oil prices increased after Saudi Arabia raised June crude prices for most regions. Saudi Arabia increased the Official Selling Prices (OSPs) for its crude sold to Asia, Northwest Europe, and the Mediterranean in June, indicating expectations of robust demand during the summer season.
Moreover, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) are expected to maintain oil production levels for an additional three months when ministers reassess output allocations on June 1. The OPEC+ producers announced last week that they are prepared to prolong voluntary output cuts of 2.2 million barrels per day (bpd) beyond June if Oil demand fails to recover as anticipated.
On the geopolitical side, the prices of the liquid Gold gained ground due to the concerns about the possibility of a Gaza ceasefire deal being failed. This has renewed supply fears that the Israel-Hamas conflict could escalate further in the Middle East, as reported by Reuters. Hamas reaffirmed its demand for an end to the conflict in exchange for the release of hostages, a condition Israeli Prime Minister Benjamin Netanyahu firmly rejected.
On the demand side, the lower-than-expected US jobs data has reignited hopes for Federal Reserve interest rate cuts this year, influencing the demand side of the equation. Lower interest rates could stimulate economic activity in the United States (US), consequently enhancing the demand outlook for Oil. Furthermore, this sentiment exerts downward pressure on the US Dollar (USD), effectively lowering the cost of crude Oil for countries utilizing alternative currencies.