The Organization of Petroleum Exporting Countries (OPEC), a producer group, extended supply restrictions, but markets remained cautious due to lackluster Chinese demand, resulting in a weekly loss in oil prices that closed 1% lower.
Locally, on the Multi Commodity Exchange (MCX), futures for crude oil with an expiration date of March 19 were last closed at $6,462 per barrel, down 0.05 percent.
During the session, prices fluctuated between $6,427 and $6,525 per barrel, with a closing value of $6,459 per barrel earlier.
What influences the price of crude oil?
-Data released on Thursday indicated that although China’s imports of crude oil increased in the first two months of the year when compared to the same period in 2023, they were also lower than the months before.
-OPEC members, spearheaded by Saudi Arabia and Russia, decided on Sunday to prolong their voluntary reduction in oil output by 2.2 million barrels per day until the second quarter.
-In the last two sessions, signals regarding the potential timing of rate cuts in the US and the EU were absorbed by the oil markets.
-The Bureau of Labor Statistics said that US job growth increased by 275,000 new nonfarm payrolls in February, exceeding economists’ projections. The US economy may be slowing down, which would have delayed the Federal Reserve’s planned interest rate cut in June. The unemployment rate also increased and pay growth slowed.
-Jerome Powell, the chair of the US Federal Reserve, stated on Thursday that the bank was “not far” from having enough assurance that inflation is declining enough to start lowering interest rates.
-French central bank chief and ECB policymaker Francois Villeroy de Galhau said that the European Central Bank (ECB) will begin cutting interest rates somewhere between April and June.
“The current market dynamics underscore the delicate balance between supply and demand,” stated Tobi Opeyemi Amure, analyst at Trading.Biz. “While output cuts by major producers have contributed to supply tightness, the demand outlook in key markets like China and the US will play a crucial role in shaping the trajectory of crude oil prices.”
