WTI ends losing streak after Saudi oil price hike

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The West Texas Intermediate (WTI) crude oil price snapped its losing streak, trading around $78.20 a barrel in the Asian session on Monday, after Saudi Arabia raised June crude prices for most regions.

The Saudi kingdom increased the Official Selling Prices (OSPs) for its crude sold to Asia, northwest Europe and the Mediterranean in June, indicating expectations of robust demand during the summer season.

Moreover, the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) are expected to maintain oil production levels for an additional three months when ministers reassess output allocations on June 1.

The OPEC+ producers announced last week that they are prepared to prolong voluntary output cuts of 2.2 million barrels per day beyond June if oil demand fails to recover as anticipated.

On the geopolitical side, the prices of the liquid gold gained ground due to the concerns about the possibility of a Gaza ceasefire deal having failed. This has renewed supply fears that the Israel-Hamas conflict could escalate further in the Middle East, as reported by Reuters.

Hamas reaffirmed its demand for an end to the conflict in exchange for the release of hostages, a condition Israeli Prime Minister Benjamin Netanyahu firmly rejected.

On the demand side, the lower-than-expected US jobs data has reignited hopes for Federal Reserve interest rate cuts this year, influencing the demand side of the equation.

Lower interest rates could stimulate economic activity in the United States, consequently enhancing the demand outlook for oil. Furthermore, this sentiment exerts downward pressure on the US Dollar, effectively lowering the cost of crude for countries utilising alternative currencies.

(Source: OANDA)