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Oil futures rebounded on Tuesday on signs that Russia is adhering to promised export cuts while Libyan production curbs pushed prices higher.
West Texas Intermediate (CL=F) rose as much as 1.5% during trading, while Brent Crude Oil Futures (BZ=F) also rose, partially reversing a steep decline from the previous session.
Protests in Libya continue to drain around 300,000 barrels a day from the market following the closure of a major oil field last week.
The latest Russian crude export data tracked by Bloomberg shows OPEC+ countries started the year in line with promised production cuts.
Dennis Kistler, senior vice president at BOK Financial, said on Tuesday that it was “now more likely” that oil consortium leader Saudi Arabia would extend its own production cuts of 1 million barrels per day into the first quarter of this year. “There is,” he said.
“Most of yesterday’s losses are being written off as India’s fuel demand increases and China’s refinery capacity increases,” he added.
WTI and Brent fell more than 3% on Monday after Saudi Aramco cut oil prices for Asia to their lowest levels since the end of 2021, sparking demand concerns.
Increased inventories of both gasoline and distillate fuels (mainly including diesel) last week also weighed on the crude oil market.
Markets remain skeptical of OPEC+’s commitment to stick with deep production cuts announced in late November. Shortly after the cartel’s last meeting in 2023, Angola announced that the cartel would withdraw from the group, citing production disputes.
Analysts say that despite OPEC’s production cuts, increased crude oil production in the United States and other countries will increase supply to the market this year.
Analysts at Bank of America recently raised their forecast for 2024 to $80 per barrel from $90, saying “non-OPEC+ supply growth and rifts within OPEC+ are softening fundamentals.” I pulled it down.
Ines Ferre is a senior business reporter at Yahoo Finance. Follow her on Twitter @ines_ferre.
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