Al Mayadeen English

  • Ar
  • Es
  • x
Al Mayadeen English

Slogan

  • News
    • Politics
    • Economy
    • Sports
    • Arts&Culture
    • Health
    • Miscellaneous
    • Technology
    • Environment
  • Articles
    • Opinion
    • Analysis
    • Blog
    • Features
  • Videos
    • NewsFeed
    • Video Features
    • Explainers
    • TV
    • Digital Series
  • Infographs
  • In Pictures
  • • LIVE
News
  • Politics
  • Economy
  • Sports
  • Arts&Culture
  • Health
  • Miscellaneous
  • Technology
  • Environment
Articles
  • Opinion
  • Analysis
  • Blog
  • Features
Videos
  • NewsFeed
  • Video Features
  • Explainers
  • TV
  • Digital Series
Infographs
In Pictures
  • Africa
  • Asia
  • Asia-Pacific
  • Europe
  • Latin America
  • MENA
  • Palestine
  • US & Canada
BREAKING
Israeli media: Strategic location in the south likely hit
Israeli media outlet: Reports of missiles falling in at least 7 areas, including Askalan, Safad, and Isdud
Israeli media: Sirens sounding non-stop across 'Israel' with explosions heard throughout the area
Sirens sound again in the south
Israeli media platform: About 4 missile salvoes were launched across 'Israel'
Israeli media: An additional missile salvo was identified from Iran, this time toward the north
Israeli media: Explosions heard in al-Quds and HaShfela
Israeli media: Another salvo of missiles was also identified being fired toward the south
Israeli media: Another salvo of missiles was identified toward the center and al-Quds
Home Front Command: New missiles detected en route to 'Israel'

Oil prices down 6% despite OPEC output reduction

  • By Al Mayadeen English
  • Source: Agencies
  • 21 Apr 2023 00:12
5 Min Read

Oil prices have decreased by 6% despite OPEC+ dropping its output and amid US inflation.

  • x
  • Gas is pumped at a Costco Warehouse in Cranberry, Pennsylvania, on January 23, 2023 (AP)
    Gas is pumped at a Costco Warehouse in Cranberry, Pennsylvania, on January 23, 2023 (AP)

Oil prices dropped 6% on the week and stabilized for the third time in four days as US rate hikes and recession fears outweighed producer organization OPEC's recent output adjustment to support the market.

New York-traded West Texas Intermediate, or WTI, crude closed down $1.87, or 2.4%, at $77.29 a barrel, after a three-week low at $76.97.

London-traded Brent crude, the global benchmark for oil, finished the day down $2.02, or 2.4%, at $81.10 per barrel, after a three-week low at $80.78.

Crude prices dropped by 2% or more for the third time in four days, resulting in a 6% loss for the week as oil markets were pressured by fears of a recession later this year and the eleventh US rate rise since the epidemic.

Before the selloff, crude prices rose to their highest levels since November, with WTI surging to over $83 and Brent to over $87, supported by deeper production cuts announced by OPEC+, the grouping of the 13-member Organization of Petroleum Exporting Countries, with 10 independent oil producers, including Russia.

The rise in the dollar and US Treasury rates from their one-year lows last week also contributed to this week's drop in oil prices. Before both turned negative on Thursday, the dollar had been on the rise and yields had been getting close to their top from the prior session.

In general, a stronger dollar reduces demand for items priced in the currency abroad. Increased US bond rates also tend to reduce international capital inflows while decreasing the attraction of risky assets.

Read next: US set for recession next year, economists predict

Anticipations of higher oil prices have been hindered by persistent rumors that the Federal Reserve would likely hike interest rates by another quarter point at its policymakers' meeting in May.

This week's tumble in oil prices came despite the release of positive US inventory data. According to the Energy Information Administration's (EIA) Weekly Petroleum Status Report, refineries produced more gasoline for commercial vehicles last week, causing crude oil stocks in the United States to decline at their fastest rate in three weeks.

Related News

The clock no longer ticks in your favor: Iran to US

Russia urges West to drop hostility, warns against NATO threat

In an effort to fill the vacuum left by OPEC+'s announcement of greater production cutbacks to support a market that hit 15-month lows in March, WTI was also down, potentially for technical reasons.

"Now it's a question of whether that gap will be filled, with the high from the Friday before falling just shy of $76 in WTI and $78 in Brent," said Craig Erlam, an analyst at online trading platform OANDA, Sputnik reported.

"That would require another drop of around 3% but only take the price back to the middle of the range oil was trading in for months prior to the SVB collapse."

Saudi energy minister announced today that Saudi Arabia will be cutting down oil production at a rate of 500,000 barrels per day until the end of 2023, for the sake of stabilizing the oil market.

Russia reciprocated the decision and announced a downplay of oil production at the same rate. Iraq, UAE, Algeria, Kuwait, and Oman will be reportedly following suit to voluntarily cut down on oil production.

According to Deputy Prime Minister Alexander Novak, Russia will extend its 500,000 barrels per day (bpd) oil output cut until the end of the year.

Within minutes of Saudi Arabia, Kuwait, Oman, Iraq, and the United Arab Emirates' declarations, Russia made the announcement.

The head of investment company Pickering Energy Partners stated on Sunday that the unexpected 1.15 million barrel per day output cut by OPEC producers could increase world oil prices by $10 per barrel.

Read more: Oil prices fell sharply after reports of UAE mulling OPEC withdrawal

Back in November, citing economic challenges such as high inflation and interest rate increases, OPEC cut its forecast for 2022 global oil demand growth - cutting down next year’s figure as well. 

Moreover, according to Federal Reserve Bank of San Francisco President Mary Daly, the US central bank may no longer need to hike interest rates on a monthly basis because inflation in the US looks to be moderating.

During a public event, Daly stated that "we don't keep raising interest rates until we get to 2%," alluding to the Fed's long-term inflation objective of 2% vs the current rate of 5%.

  • United States
  • OPEC
  • Federal reserve
  • UAE
  • inflation
  • US inflation
  • OPEC+
  • Saudi Arabia

Most Read

Iran launches 9th wave of Op. True Promise 3, destroys IOF air defense

Iran launches 9th wave of Op. True Promise 3, destroys IOF air defense

  • MENA
  • 17 Jun 2025
Rescue team work at the site where a missile launched from Iran struck Tel Aviv, Israel, Monday, June 16, 2025 (AP)

Wave 12 of Operation True Promise 3 launched, Sejjil deployed: IRGC

  • Politics
  • 18 Jun 2025
Israeli workers survey the site where a missile launched from Iran struck in Haifa on Sunday, June 22, 2025. (AP)

True Promise 3, wave 20: 40 missiles launched, Kheibar-Shekan in first

  • Politics
  • 22 Jun 2025
Iran launches missile barrage to Tel Aviv, casualties reported

True Promise 3, wave 14: Tel Aviv targeted, casualties reported

  • Politics
  • 19 Jun 2025

Coverage

All
The Ummah's Martyrs

Read Next

All
Secretary of Iran's Supreme National Security Council Ali Shamkhani, speaks with then-Syrian Prime Minister Imad Khamis in a meeting in Tehran, Iran, Tuesday, January 17, 2017 (AP)
Politics

Iran holds the initiative after nuclear strikes, Shamkhani says

Blood stains a religious painting inside Mar Elias Church, where a suicide bomber detonated himself in al-Dwela, on the outskirts of Damascus, Syria, on Sunday, June 22, 2025 (AP)
Politics

UN, regional governments condemn Damascus church bombing

A B-2 bomber arrives at Whiteman Air Force Base Missouri, Sunday, June 22, 2025, after returning from a massive strike on Iranian nuclear sites on Saturday (AP)
Politics

Israeli media: US-Israeli strike on Iran failed to end war

China UN Ambassador Fu Cong addresses the United Nations Security Council, Monday, March 24, 2025. (AP Photo/Richard Drew)
Politics

China slam US strikes on Iran nuclear sites

Al Mayadeen English

Al Mayadeen is an Arab Independent Media Satellite Channel.

All Rights Reserved

  • x
  • Privacy Policy
  • About Us
  • Contact Us
  • Authors
Android
iOS