Oil prices rise as extension of OPEC+ output reductions outweighs financial concerns


(MENAFN) On Wednesday, oil prices experienced a modest uptick driven by speculation surrounding the potential extension of production cuts by OPEC+ member countries. Despite concerns stemming from the anticipation of delayed interest rate cuts in the United States and a notable increase in US crude inventories, the market responded positively to prospects of sustained production limitations by the oil-producing alliance.

Brent crude futures edged up by 14 cents to reach USD83.79 per barrel, while US West Texas Intermediate crude futures saw a marginal increase of six cents, bringing the price to USD78.93 per barrel as of 15:50 GMT. Notably, both benchmarks had initially witnessed a 1 percent decline earlier in the trading session, reflecting the market's sensitivity to fluctuating economic indicators and geopolitical factors.

The US Energy Information Administration's report on Wednesday revealed a larger-than-expected rise in crude inventories, with stocks climbing by 4.2 million barrels to reach a total of 447.2 million for the week ending February 23. This surpassed earlier forecasts, which had anticipated a more modest increase of 2.74 million barrels. Concurrently, concerns regarding the trajectory of US interest rates were exacerbated by comments from Michelle Bowman, a member of the US Federal Reserve, who indicated a reluctance to hasten rate cuts. Bowman highlighted the persistent upward risks of inflation, cautioning against premature adjustments that could potentially exacerbate price pressures or undermine progress in managing inflationary concerns.

Amidst these economic uncertainties, the market's attention remained focused on developments within the OPEC+ alliance, where discussions regarding the extension of production cuts continued to influence sentiment. The prospect of ongoing efforts to stabilize global oil markets through coordinated production adjustments provided a semblance of support to oil prices, tempering the impact of prevailing economic headwinds and fostering a sense of cautious optimism among market participants.

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