Oil Rises On OPEC Expectations As Calls For $100 Prices Resume

by Ship & Bunker News Team
Thursday March 28, 2024

The roller coaster trading nature of crude took an unexpected upward swing on Thursday based entirely on the familiar sentiment that the Organization of the Petroleum Exporting Countries (OPEC) will maintain its current output cuts.

As of 17:28 GMT, Brent was up $1.30 at $87.39 per barrel, and West Texas Intermediate was up $1.43 at $82.78 per barrel.

Much of the trading was reportedly driven by anticipation of no unexpected news at next week's Joint Monitoring Ministerial Committee of OPEC; it was also influenced by hopes that interest rates would be cut sometime this year.

JPMorgan analysts said in a note, "The market is converging on a June start to cuts for both the Fed and the European Central Bank."

Also, the Commerce Department's Bureau of Economic Analysis reported that the U.S. economy grew faster than previously estimated in the fourth quarter, with gross domestic product increasing at a 3.4 percent annualized rate, conducive to better than expected energy demand.

Additionally, JPMorgan analysts theorized  that if Russia decides to cut production further in the coming quarter, that combined with the OPEC extensions could cause the market to go into supply deficit and crude prices to rally to $100 by the end of the Northern Hemisphere's summer.

In other bullish oil news on Thursday, data from LSEG Oil Research showed that higher arrivals of Russian crude to China and India are set to boost Asian crude imports to 27.48 million barrels per day (bpd), the highest level in 10 months.

However, Reuters pointed out that the recent rise in prices to above $85 per barrel Brent could slow imports into these countries and affect other Asian importers in the coming months.