The price of oil rose by more than 1.5%, continuing yesterday's increase, and reaching the highest level since May 2 after the Saudi energy minister urged speculators betting on falling oil prices to be on the lookout. This announcement was made ahead of the OPEC+ meeting (June 4) and increased the likelihood of further cuts in oil production.
A slight weakening of the US dollar and data on oil reserves also supported oil prices. The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) fell by 0.07% to 103.44.
Meanwhile, the American Petroleum Institute said that in the week ending May 19, oil reserves fell by 6.8 million barrels (the biggest drop since the end of March). Gasoline inventory reportedly showed a draw of 6.4 million barrels for the week, distillate inventory showed a draw of 1.77 million barrels, and stockpiles at the Cushing, Oklahoma, storage hub showed a build of 1.7 million barrels. The API data serves as a precursor to official inventory data, which will be published today by the U.S. Energy Information Administration, or EIA. Economists had expected the EIA report to indicate an increase in oil reserves by 0.775 million barrels.
At the same time, further increase in oil prices was limited by the uncertainty regarding the increase in the ceiling of the US government debt. House Speaker Kevin McCarthy said late Tuesday the two parties had yet to reach a deal to avert a first-ever default.