Dear clients,
Oil prices were almost flat on Monday as investors weighed the prospect of OPEC+ supply cuts in May with concerns about weakening global growth, which could dampen fuel demand.
Futures for Brent crude fell 7 cents to $85.05 a barrel by 06:30 GMT, while West Texas Intermediate crude fell 3 cents to $80.67 a barrel.
Both contracts rose for the third week in a row, returning to November levels after the Organization of the Petroleum Exporting Countries and its allies surprised investors by announcing new production cuts starting in May.
Following the announcement, the world’s largest oil exporter raised oil prices in May for urgent customers in Asia and the US. State oil giant Saudi Aramco has also notified several Asian clients that they will receive full contract volumes in May, despite production cuts.
In parallel, investors are watching the progress of negotiations between Iraq and Kurdistan on the resumption of exports of northern oil, which could bring more sour oil to the world market.
As early as this week, global financial markets are waiting for the US inflation report, which may help investors assess the short-term trajectory of interest rates.
Analysts believe that despite expectations that the Federal Reserve may slow down rate hikes due to the recent banking crisis, borrowing costs could still rise if inflation remains high.
The sharp rise in interest rates has driven the US dollar up, making dollar-denominated commodities such as oil more expensive for investors holding other currencies.
