Oil prices fell around 3 percent to start the week, after going down in previous two weeks, as traders took a cautious approach to the possibility of the US Federal Reserve announcing yet another rate hike.

By Daily Independent On Jun 12, 2023

As of 1400 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, shed $2.08 (-2.78 percent) to reach $72.71. The West Texas Intermediate (WTI), the main oil benchmark for North America, went down by $2.31 (-3.29 percent) to $67.86.

Similarly, the price of Russian Sokol decreased by $1.21 (-1.84 percent) to $64.72. Arab Light prices witnessed a decrease of $1.02 (-1.32 percent) to reach $76.35 a barrel.

However, the price for Opec Basket increased by $1.08 (+1.43 percent) to $76.55. The OPEC Reference Basket of Crudes (ORB) is made up of Saharan Blend, Girassol, Djeno, Zafiro, Rabi Light, Iran Heavy, Basra Light, Kuwait Export, Es Sider, Bonny Light, Arab Light, Murban and Merey.

Meanwhile, Goldman Sachs revised down its price outlook for crude oil for the rest of the year. The bank now expects Brent crude to end 2023 at less than $90 per barrel, citing expectations of weaker demand. The bank cited expectations of higher supply from Russia, Iran, and Venezuela for next year as well, with additional production of 800,000 bpd. That would offset the additional cuts Saudi Arabia announced at the last OPEC+ meeting, should the kingdom decide to extend these into next year.

In a related move, Saudi Aramco, the world’s largest crude oil exporter, has assured at least five North Asian refiners they would get the full crude volumes they had asked for in July, even after the production cut Saudi Arabia announced last week. On June 4, the OPEC+ producers decided to keep the current cuts until the end of 2024, while OPEC’s top producer, Saudi Arabia, said it would voluntarily reduce its production by 1 million bpd in July, to around 9 million bpd. The cut could be extended beyond July, Saudi Energy Minister Prince Abdulaziz bin Salman said. TLTP