Ekonomické zprávy

Oil shows negative dynamics

Oil prices declined moderately amid concerns about the recovery of demand in China and the rebound of the US dollar index from the session low. Market participants also followed the negotiations on raising the US debt ceiling.

Market participants are now waiting for a key meeting between US President Joe Biden and Republican House Speaker Kevin McCarthy. A debt agreement needs to be reached and passed by both chambers of Congress before the government runs out of money to pay its bills. Treasury Secretary Janet Yellen has warned that the US may not be able to pay its bills by mid-June.

Meanwhile, recent weak economic data from China has raised concerns about demand in the world's top crude importer and No. 2 oil consumer.

A certain support for prices was provided by a reduction in oil supplies from Canada against the background of ongoing forest fires in the province of Alberta (top energy-producing province). Sources said at least two buyers were notified of force majeure and a reduction in their receipts of Canadian low-sulfur crude oil.

The impact of the voluntary reduction in OPEC+ oil production, which came into effect this month, is also being felt in the market. The total volume of crude oil and petroleum products exports from OPEC+ decreased by 1.7 million barrels per day by May 16, JP Morgan experts said, adding that Russian oil exports are likely to decline by the end of May.

Last week, the International Energy Agency warned of an impending shortage in the second half of the year, when demand is expected to exceed supply by almost 2 million barrels per day.

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