Oil prices saw an increase today as a result of declining oil and fuel stocks in the United States, coupled with growing speculation regarding potential production cuts by the “OPEC+” alliance. The rise in prices follows a warning from the Saudi Energy Minister to speculators in the market, reports Al Rai Daily.
During early trading on Wednesday, Brent crude futures experienced an 86-cent, or 1.1 percent, increase, reaching $77.70 per barrel by 00:07 GMT. Similarly, US West Texas Intermediate crude rose by 88 cents, or 1.2 percent, to $73.79 per barrel. Late Tuesday, data released by the American Petroleum Institute revealed a significant decline in crude oil and fuel inventories across the United States.
According to the institute, crude stocks fell by approximately 6.8 million barrels in the week ending on May 19. Gasoline stocks also saw a decline of around 6.4 million barrels, while distillate stocks fell by about 1.8 million barrels.
In addition to the inventory data, certain countries within the “OPEC+” coalition have commenced implementing production cuts this month. The possibility of further cuts being announced was amplified after Saudi Energy Minister Prince Abdulaziz bin Salman cautioned short sellers and urged them to exercise caution.
Interpreting this statement as a potential signal, investors believe that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, may consider unveiling additional production cuts at an upcoming meeting scheduled for June 4.