KUWAIT: Crude oil prices went below the $80/b level for the first time since February-2024 during the first week of June-2024 but swiftly recovered as the Organisation of the Petroleum Exporting Countries (Opec)reiterated its demand growth expectations and traders viewed the current price trend as an overreaction and an oversold market, Kamco Invest reported.
The sanctions on Iran’s shipping sector also supported prices. The initial monthly decline was led by receding war risk premium as well as fears that near-term
demand may not be as healthy as was being expected, especially in China. This was also reflected in the physical market with lower quoted prices by producers eyeing lower-than- expected summer demand.
The slide in prices last week also came after the Opec+ meeting that proposed limited and controlled unwinding of the additional voluntary cuts, depending on the demand trends starting from Q4-2024. On the other hand, minimal support came from an unplanned shutdown of Buzzard oil field in the North Sea and the fuel refinery fire in Russia.
Data from US Energy Information Administration showed positive trends for the summer demand season with higher demand for gasoline and higher refinery runs, but an increase in crude oil inventories affected prices.
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