Oil prices try to recover from six-month trough

2023-12-07 13:55PM UTC

Global oil prices rose on Thursday for the first time in six days away from six-month lows as the dollar slows down.


Concerns about US oversupply were assuaged, after a surprise drop in US crude stocks last week, while US crude production tapered off from recent record highs.


Prices were also boosted by remarks from member nations in the OPEC+ organization about deepening production cuts in the first quarter of next year to support prices.


Global Oil Prices 


US crude rose 1.5% to $70.38 a barrel, while Brent added 1.6% to $75.43 a barrel.


US crude lost 3.9% on Wednesday, the fifth loss in a row, plumbing six-month lows at $69.13 a barrel, while Brent declined 3.7% to $74.14 a barrel, the lowest since June 29. 


The recent wave of losses came amid concerns about softening demand in the US and China.


The Dollar


The dollar index fell over 0.4% on Thursday off three-week highs at 104.23 against a basket of major rivals. 


Dollar was also hurt by a string of weak US labor data which pave the way for early interest rate cuts in 2024.


US Stocks 


The Energy Information Administration reported a drawdown of 4.6 million barrels in the week ending December 1, beating estimates of a 1.3 million barrels drawdown. 


Such a drawdown comes following a wave of buildups in the past six weeks, and it's a sign for rebounding demand in the US.


US Production 


The EIA also reported a drop of 100 thousand bpd in US crude output last week, the first such decline since July to 13.1 million bpd.


OPEC+ Remarks 


OPEC+ member Algeria said it's prepared to cut output further if needed after oil prices hit five-month lows.


Russia Vice Prime Minister said the organization is prepared to extend and deepen production cuts in the first quarter of 2024 to boost prices. 

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