By Adedapo Adesanya
Crude oil prices rose on Tuesday on forecasts of a tighter gasoline market and a warning from the Saudi energy minister to speculators that raised the prospect of further output cuts by the Organisation of the Petroleum Exporting Countries and its allies (OPEC+).
Brent crude futures increased by 85 cents or 1.1 per cent to settle at $76.84 a barrel, while the US West Texas Intermediate (WTI) crude futures settled at $72.91 a barrel after adding 86 cents or 1.2 per cent.
On Monday, prices rose 1 per cent on optimism fed by a surge in gasoline futures in the world’s largest economy, the US.
Gasoline futures rose more than 1 per cent in the US on Tuesday, with analysts expecting a third straight weekly decline in inventories ahead of peak summer travel season, which starts on the US Memorial Day holiday on May 29.
The US Energy Information Administration (EIA) will publish the official inventory data on Wednesday.
Fears of a supply squeeze mounted after Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman, said he would keep short sellers, those betting that prices will fall, “ouching” and told them to “watch out”.
“Speculators, like in any market, are there to stay, I keep advising them that they will be ouching; they did ouch in April. I don’t have to show my cards. I’m not a poker player… but I would just tell them to watch out,” he told the Qatar Economic Forum, organised by Bloomberg.
Saudi Arabia, the world’s largest oil exporter, and other OPEC+ producers announced surprise voluntary cuts in April that lifted prices after a slump driven by concerns that a banking crisis could impact demand.
The new comments could mean OPEC+ will consider further output cuts at a meeting on June 4.
Meanwhile, another round of debt ceiling talks ended on Tuesday with no signs of progress as the deadline to raise the government’s $31.4 trillion borrowing limit or risk default ticked closer.
The country’s top two parties remain deeply divided about how to rein in the federal deficit, with Democrats arguing wealthy Americans and businesses should pay more taxes while Republicans want spending cuts. We z
Analysts note that prices are likely to remain within their broad year-to-date trading range as the economy continues to slow while the refill of the Strategic Petroleum Reserve and OPEC manages prices relative to global demand needs.
Dipo Olowookere