 "oil prices")
Oil prices were little changed in choppy trading on Tuesday as investors debated the Organization of the Petroleum Exporting Countries and allies (Opec+) plans to cut more production and weak economic data from the United States and China that could hurt oil demand.
Brent crude futures were down 30 cents, or 0.3 per cent, to $84.63 a barrel by 11:05 am ET (8.35 PM IST). US West Texas Intermediate (WTI) crude futures traded at $80.19 a barrel, down 23 cents, or 0.2 per cent.
“While the price action in crude is impressive, we will need to see demand hold and grow to push crude into the upper $80’s,” said Dennis Kissler, senior vice president of trading at BOK Financial.
Both benchmarks jumped by more than 6% on Monday after the Opec+, rocked markets with an announcement of voluntary production cuts of 1.66 million barrels per day (bpd) from May until the end of 2023.
The latest pledges bring the total volume of cuts by Opec+ to 3.66 million bpd, including a 2 million barrel cut last October, equal to about 3.7 per cent of global demand.
The Opec+ production curbs led many analysts to raise their Brent oil price forecasts to around $100 per barrel by year-end.
Goldman Sachs lifted its forecast for Brent to $95 a barrel by the end of this year, and to $100 for 2024.
However, a slump in US manufacturing activity in March to its lowest level in nearly three years, and weak manufacturing activity in China last month raised demand concerns.
Investors also worried about higher costs for businesses and consumers, raising fears an inflationary hit to the world economy from rising oil prices will result in more interest rate hikes.
Market watchers have been trying to gauge how much longer the US Federal Reserve may need to keep raising rates to cool inflation, and whether the US economy may be headed for a recession.
Dated Brent is the world’s most important oil benchmark, used to set prices of more than two-thirds of crude oil in the world. Oil-producing states often sell their barrels at small premiums or discounts to “Dated,” as it’s known in the industry. The benchmark serves as an indicator of the physical market for crude and acts as an anchor for Brent futures traded on exchanges.
On Sunday, a group of countries from the Opec+ alliance announced a surprise oil production cut of more than 1 million barrels a day, sending a shock wave through the global oil market.
