US West Texas Intermediate crude futures ended higher this week after some friendly news from OPEC + on Thursday. The market was about to end the week low until OPEC and its allies made an announcement that may have shaken some of the weaker short positions.
Until then, catalysts weighing on prices were resumption of traffic on the Suez Canal after a huge ship blocking the landmark was released earlier this week, mixed US inventory data, stronger US dollar, fear of increasing supply Iran and concern over weakening demand recovery.
OPEC + agrees to gradually increase crude oil production
OPEC and its allies have announced that they have decided to gradually increase oil production by about 2 million barrels a day from May to July, moving cautiously in the pace of the recovery of the global economy from the pandemic COVID-19.
According to reports, the group known as OPEC + is restoring production that was cut last year to sustain prices as demand declined during the worst of the pandemic recession, which undermined fuel demand. The group will add 350,000 barrels per day in May, 350,000 in June and 400,000 in July.
Traders responded by raising prices on Thursday, suggesting that they were pricing a more aggressive increase in production for May. Despite the rise, the news is not particularly optimistic, so gains may be limited in the short term.
Traffic starts flowing on the Suez Canal
Ships …