2023-04-11 17:45:45 ET
U.S. crude oil pushed past $81/bbl Tuesday, rebounding from the previous session's lowest settlement since before Saudi Arabia announced the unexpected OPEC+ production cuts.
Front-month Nymex crude ( CL1:COM ) for May delivery ended +2.2% to $81.53/bbl, its highest settlement value since January 23, and June Brent crude ( CO1:COM ) closed +1.7% to $85.61/bbl, its best finish since March 6.
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The oil market is " stuck between two competing narratives ," DTN market analyst Troy Vincent said, with OPEC+ cuts and China's anticipated economic rebound on the bullish side, and a growing expectation that the U.S. will move into recession later this year on the bearish side.
Oil prices held gains Tuesday even after a U.S. Energy Information Administration report estimated crude supply will top demand in the next two years, despite the recent OPEC+ production cut.
OPEC output will fall by 500K bbl/day this year and then rise by 1M bbl/day in 2024, after its agreement expires, according to the EIA forecast, which also said total non-OPEC liquid fuels production would rise by 1.9M bbl/day in 2023 and 1M bbl/day in 2024.
Roughly half the expected gain by non-OPEC producers in the next two years is seen coming from the U.S., which is forecast to boost crude production by 5.5% to 12.5M bbl/day in 2023 and another 1.7% to 12.75M bbl/day in 2024.
Crude oil prices surged after the OPEC+ production news but stayed flat for the rest of the week at ~$80/bbl .
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U.S. crude oil resumes gains, scoring best settlement since January