Oil prices continued to climb on Thursday, with WTI up above $70 and Brent rising to $75.60.
Optimism around both economic growth and oil demand was boosted on Wednesday when the Fed signaled it would cut interest rates next year.
The Fed’s comments also triggered a rally in stocks, bonds, and gold, and sent the U.S. dollar to a four-month low.
Saudi Arabia reduced the official selling price of its flagship crude by $0.50 per barrel for Asian buyers in January.
This is the first price reduction in seven months, although it is a smaller reduction than analysts had expected.
The move was in response to intensified international competition after OPEC production cuts pushed Middle Eastern oil prices higher.
Oil prices crashed by 4% early on Wednesday morning after confirmation that this weekend’s OPEC+ meeting would be postponed.
OPEC+ members are set to meet on Sunday to discuss production policy, and unnamed sources have claimed that the group will be discussing further production cuts.
Saudi Aramco reports a profit decline but exceeds analyst expectations and maintains large investor dividends.
Brent crude futures rose 55 cents, or 0.65%, to US$85.44 a barrel by 0700 GMT, while U.S. West Texas Intermediate crude was at US$81.14 a barrel, up 63 cents, or 0.78%
Oil prices slipped more than 1% on Monday as investors adopted caution ahead of a U.S. Federal Reserve policy meeting and China’s manufacturing data due this week, offsetting support from tension in the Middle East.
A spike in Brent crude prices last week to a 10-month high of over $90 a barrel has brought cheers to upstream oil companies with hopes of wider profit margins.
Bullish sentiment has been growing in oil markets this week, with inflation in the U.S. slowing dramatically and markets tightening on the back of supply disruptions and production cuts.
A global shortfall in crude oil supply is set to deepen in the third quarter as the world’s top exporter Saudi Arabia pledged extra output cuts from July in a move likely to push Brent towards $100 a barrel by the end of the year, analysts said.