Forex Analysis & Reviews: 05.06.2023 - Oil prices rise amid...

Live Chat

InstaForex - Official partner of Dragon Racing

This section features the most important information about trading with InstaForex. We provide both analysis from leading experts for experienced traders and articles on trading conditions for beginners. Our services will help increase your profit potential.

Become Trader

Account Opening

See also

Trading Conditions

Forex Analytics

Charts

This section is designed for those who are just starting their trading journey. InstaForex educational and analytical materials will meet your training needs. Our experts' recommendations will make your first steps to trading success simple and clear.

Start as Beginner

How to start trading

Useful information

Training and recordings

InstaForex innovative services are an essential element of productive investment. We strive to provide our clients with advanced technical capabilities and make their trading routine comfortable as we are recognized as the best broker in this regard.

Become Investor

PAMM System

ForexCopy System

Passive investments

OYS account

Partnership with InstaForex is beneficial and top-tier. Join our affiliate programs and enjoy bonuses, partner rewards, and the possibility to travel with the team of the world-renowned brand.

Become Partner

Main Page

Partner Area

Advantages for Affiliates

Registration

This section contains the most lucrative offers from InstaForex. Receive bonuses when topping up an account, compete with other traders, and get real prizes even when trading in a demo account.

All Promo Campaigns

Bonuses

Contests

Events

Holidays with InstaForex are not only pleasant but also useful. We offer a one-stop portal, numerous forums, and corporate blogs, where traders can exchange experiences and become successfully integrated into the Forex community.

Full details

Forums

We are in social networks

Forex humour

Forex Portal

InstaForex is an international brand created in 2007. The company provides services for online FX trading and is recognized as one of the world's leading brokers. We have won the trust of more than 7,000,000 retail traders, who have already appreciated our reliability and focus on innovations.

Learn More

History

Why Choose Us

InstaSport

Regulation

Company News

Awards

InstaForex Stars

InstaForex Offline

Key documents

Social Responsibility

InstaForex - Official partner of Dragon Racing

05.06.2023 10:36 PM

Oil prices rise amid expectations of production cuts

Oil prices continued rising on Monday following the results of the OPEC+ meeting.

In afternoon trades, Brent oil futures for August were up by 2.18%, hitting $77.79 per barrel. At the same time, the price of WTI oil futures for July had risen by 2.34% to reach $73.42 per barrel.

Market participants are assessing news on oil production volumes, defined by OPEC+ countries at their most recent meeting in Vienna. As decided at the meeting, the oil output will be reduced by 2 million barrels per day by the end of this year, amounting to 41,856 barrels daily.

Next year, production will be further cut by an additional 1.393 million barrels, reaching 40,463. Saudi Arabia and Russia plan to maintain their production cut at 500,000 barrels per day. Moreover, the Saudi announced plans to significantly reduce its oil production in July by 1 million barrels.

This decision by OPEC+ likely reflects the alliance's doubts about global economic growth over the next two years. This means that the cartel does not anticipate substantial demand for energy in the near future.

Recent economic growth data from leading countries around the world has been downbeat. For instance, GDP growth in the first quarter of 2023 was barely noticeable in European Union countries and the UK, with a mere 0.1% increase. Germany even fell into a recession. The US and Canada also showed insignificant GDP growth, only 1.3% and 0.8% respectively.

All hopes were pinned on China, as it is the world's largest importer of energy. But its performance also fell short of expectations, with a GDP growth of only 2.2% in the first quarter.

With such data from major economies, hopes for a stable demand for crude oil are fading.

In fact, even American oil companies do not believe that there will be a high demand for oil in the near future. The number of active drilling rigs in the US has dropped by 11.5% since the beginning of this year, indicating that even in the US, extraction volumes will be significantly lower.

In addition, the market anticipates that the US financial regulator has finally ended its run of rising interest rates. These expectations arose after the release of employment data showing that unemployment in the US increased to 3.7% in May (from 3.4% in April). These figures are extremely important for the US Federal Reserve, as they directly influence its interest rate decision.

According to the CME Group, the vast majority of analysts today (79.5%) are confident that the Fed will maintain the current interest rate level of 5-5.25% at its next meeting on June 13-14. The rest of the experts lean towards the regulator raising the rate by another 25 basis points. Regardless, much will depend on the inflation data: if it is not alarming, then all future rate hikes will be insignificant.

You have already liked this post today

*Disclaimer: The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.