June 23, 2024
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Global Oil Slump Persists, Saudi-Russia OPEC+ Call Sparks Brief Recovery

Oil benchmarks are poised for their seventh consecutive weekly decline, driven by concerns of a global supply surplus and weakened Chinese demand. Brent crude futures showed a 2.6% increase to $75.98 a barrel, while U.S.

West Texas Intermediate crude futures rose 2.6% to $71.16 a barrel following a call from Saudi Arabia and Russia for additional OPEC+ members to participate in output cuts. The recovery came after both benchmarks hit their lowest levels since late June, signaling market oversupply, according to Reuters.

The week’s losses are the most significant in four weeks, with Brent and WTI crude futures expected to fall by 3.9% and 4%, respectively. The call for output cuts comes amid concerns over OPEC+’s ability to provide support, coupled with record-high U.S. production and declining Chinese crude oil imports.

Analysts anticipate only a modest reduction in production from OPEC+ countries despite their recent commitments, attributing potential shortfalls to unclear quota baselines and reliance on hydrocarbon revenues.

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