The market is generally stable on Friday as conflicting messages about supply from Russia and Saudi Arabia weighed on concerns about a stronger US dollar and weaker-than-expected demand growth ahead of the next OPEC+ policy meeting.
Brent crude was up 6 cents at 0627 GMT to $76.32 a barrel, while West Texas Intermediate (WTI) rose 18 cents to $72.01 a barrel.
The benchmarks fell more than $2 a barrel on Thursday after Russian Deputy Prime Minister Alexander Novak was reluctant at the June 4 meeting in Vienna over the possibility of further OPEC+ production cuts.
Both oil benchmarks are poised to post gains of just less than 1% in the second week.
Russian President Vladimir Putin said on Wednesday that energy prices are approaching “economically justified” levels and that there should not be an immediate change in the group’s production policy.
Putin and Novak’s words contrast with this week’s statements and warning to short sellers by Saudi Arabian Energy Minister Prince Abdulaziz bin Salman, the de facto leader of the Organization of the Petroleum Exporting Countries (OPEC). Salman’s stance had been taken by some investors as a signal that OPEC+ may consider further production cuts.
The dollar strengthened in the fifth session against major currencies, keeping the upward price action in check as US data points to a resilient economy even after an aggressive rate hike cycle by the Fed.
A stronger dollar makes dollar-denominated commodities more expensive for holders of other currencies, reducing demand. Concerns about weaker-than-expected demand growth are putting pressure on investors globally.
There are concerns that demand will decline and this will continue to put pressure on oil market sentiment in the near term. There are many signs that global demand growth is unlikely to come close to the previous year’s forecasts. The 2023 projections seem less and less likely to be achieved.
As positive data, May supply from OPEC+ and Russia fell drastically with the deals for the production cut.
As of last week, Russia’s exports fell by 400,000 barrels per day from their April 25 peak, and the total exports of producers in the OPEC+ alliance fell by 1.4 million barrels per day.