Oil prices fall at settlement

Friday, May 31, 2024 - 19:47
Point Trader Group

Oil prices fell at settlement during trading on Friday, May 31, with markets awaiting the OPEC+ alliance meeting, which is scheduled to be held on Sunday, June 2, and will discuss the possibility of extending the agreed-upon production cut until the end of the year.

Brent crude futures fell 24 cents, or 0.29%, to settle at $81.62 per barrel.

US crude futures also fell by 92 cents, or 1.18%, to settle at $76.99 per barrel.

On Friday, US crude oil ended its worst month of the year, before the OPEC+ meeting, as it fell 6% in its worst performance since November, while Brent, the global benchmark, fell 7.1% this month, according to CNBC.

On Sunday, members of the OPEC+ alliance are expected to review voluntary production cuts of 2.2 million barrels per day. Three coalition delegates told CNBC that these cuts are likely to be extended.

“We do not see appetite at this juncture to add more barrels to the market and stimulate price action to the downside,” RBC Capital Markets head of global commodities strategy, Helima Croft, told clients in a note on Wednesday, May 29.

Gasoline demand in the US has been relatively weak, with average daily fuel demand down 1.4% in the lead-up to Memorial Day (May 27), compared to the same period last year.

Demand for oil was also weak due to the warm winter that led to a decline in demand for heating oil and the US Federal Reserve’s indications that interest rates will remain higher for a longer period, which poses a challenge to hopes for a recovery in demand in the second half of the year, according to a note on Friday from JPMorgan analysts. .

Chinese refinery production fell, and European refineries were slow to return from spring maintenance, which also pressured demand, according to the investment bank. However, preliminary demand readings in April show some signs of improvement.

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