Sat, Jun 10, 2023 @ 00:09 GMT
HomeContributorsFundamental AnalysisWest Texas Crude Hits 3-Week High as OPEC Looks to Extend Production...

West Texas Crude Hits 3-Week High as OPEC Looks to Extend Production Cuts

West Texas crude has moved higher for a third straight day, punching past the symbolic $50 level for the first time since March 9. In Thursday’s North American session, WTI crude futures are trading at $50.38. Brent Crude futures have climbed to $52.98, as the Brent premium has narrowed to $2.60. On the release front, US Final GDP posted a gain of 2.1%, edging above the estimate of 2.0%. Unemployment claims jumped to 258 thousand, well above the forecast of 244 thousand. On Friday, we’ll get a look at consumer confidence levels, with the release of UoM Consumer Sentiment.

Crude oil has strengthened this week, but prices are still down sharply in March. The markets remained concerned about a global oil glut, as increasing US production has offset OPEC production cuts. US Crude Inventories continue to show surpluses, most of which have been higher than the forecast. Although another surplus was recorded last week, the reading of 0.9 million was slightly smaller than the estimate of 1.2 million. Still, total US crude inventories have reached an all-time high of 534.0 million barrels, so oil prices may have trouble staying above the $50 level. OPEC has hinted that it may extend its production cut deal past June for another six months. So far, OPEC has come up empty-handed, as oil prices have slipped since the agreement took effect on January 1.

It’s been a rough-and-tumble start for the Trump administration, which has been beset by controversy and crises since Trump assumed office in January. Trump has yet to provide any details of an economic policy, to the consternation of the markets. Last week, Trump’s proposed healthcare bill was dead on arrival before even being voted on, a humiliating defeat for the president. This setback has made the markets even more jittery about Trump, and the inquiry into the Trump administration’s links with Russia is gathering steam, which is another cause for concern for nervous investors. Trump has said he will now focus on tax reform, but the White House will need to improve coordination with Republican lawmakers to ensure that his next attempt to pass legislation is not a repeat of the healthcare debacle.

MarketPulse is a forex, commodities, and global indices research, analysis, and news site providing timely and accurate information on major economic trends, technical analysis, and worldwide events that impact different asset classes and investors. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.

Featured Analysis

Learn Forex Trading