NEW YORK (Oil Price) - Crude oil prices are about to post a third weekly gain boosted by OPEC+’s unexpected decision to reduce its combined output by another 1.16 million bpd, despite continued concern about a global slowdown.
Oil prices surged on Monday, following the Sunday declaration of the oil production group and later in the week steadied amid fresh U.S. and Chinese economic data that suggested weaker post-pandemic growth.
In the U.S., the latest weekly jobless data revision showed a higher number of initial jobless claims than previously estimated and growth in the service sector disappointed. In China, the Caixin PMI reading for March suggested a deceleration of post-pandemic growth.
These negative developments served to put a cap on oil prices and after Monday, prices were little changed, despite additional support from yet another U.S. inventory draw as estimated by the Energy Information Administration.
Bloomberg noted that oil has gained some 26% since its mid-March trough, prompted by the string of bank collapses, with Brent crude above $85 and West Texas Intermediate topping $80 per barrel.
“The oil market’s bullish momentum may have paused, but upside potential remains given the tightening supply backdrop,” PVM broker Stephen Brennock told Reuters.