Oil rose as investors evaluated the latest move by OPEC+ cornerstones Saudi Arabia and Russia to cut supply and push prices higher.
Oil prices rallied on Tuesday, after first Saudi Arabian and then Russia’s voluntary oil supply cuts on Monday.
Despite the statements, the price of Brent oil, which closed 1 percent on Monday, rose by 0.6 percent on Tuesday morning to $ 74.65, compensating some of its losses. Oil prices have fallen by about 11 percent this year due to the negative macroeconomic outlook in the US, Europe and China, despite OPEC+’s cuts.
Warren Patterson, Commodity Strategist at ING Groep, said: “It’s not surprising that Saudi Arabia continues with its voluntary oil supply cut. Fundamental dynamics are not effective in determining the direction of prices. The focus of the markets is the uncertain macro outlook.”
Despite the macroeconomic conditions that negatively affected demand, there are also institutions that predict prices to increase due to OPEC+’s moves, the US’s purchases to strengthen its strategic oil reserves, and higher energy consumption expectations in Asia.
Brent will average around $80 in the second half of the year, according to Bank of America Strategist Matty Zhao.