Crude oil began trading on Friday with a slight decline as traders weighed mixed messages from the two largest members of OPEC+.
Earlier in the week, prices jumped following comments from Saudi Arabia’s energy minister that suggested the group could announce further production cuts at its next meeting in early June.
“Speculators like in any market they’re here to stay I keep telling them they gon’ be ouch they did it in April I don’t have to show my cards , I’m not a poker player… but I would just tell them to be careful,” Abdulaziz bin Salman said on Tuesday.
Two days later, however, his Russian OPEC+ counterpart, Deputy Prime Minister Alexander Novak, came out with a different message.
Speaking to Russian media, Novak said he did not expect any change in policy at the upcoming OPEC+ meeting, noting that the uncertainties of the US debt ceiling and a slower-than-expected recovery from demand from China put pressure on prices.
Still, Novak said he expects Brent crude to rebound above $80 a barrel by the end of the year.
Oil prices have fallen around 10% since the start of the year, with the drop mainly attributed to China’s slower-than-expected post-pandemic recovery.
Some upward pressure on prices at the end of the week could come from the news that President Biden and House Speaker McCarthy are close to reaching a debt ceiling agreement, which would allow the federal government to avert an imminent default.
According to an unnamed official who spoke to Reuters, the deal would raise the ceiling for two years and cap most government spending, something Republicans insisted on while Democrats wanted a higher debt ceiling with no strings attached.
Thanks to this upward pressure, Brent Crude and West Texas Intermediate could end this week’s trading with gains, albeit quite modest.
By Irina Slav for Oilprice.com
