Further to our previous article, oil prices are rising today due to concerns about a potential supply shortage. Saudi Arabia and Russia announced they would continue reducing their oil production until the end of the year.
Brent crude, the global benchmark, reached $94.75 per barrel, marking its third consecutive week of gains. Meanwhile, West Texas Intermediate, the U.S. standard, went up to $91.68 per barrel.
The combined production cuts by Saudi Arabia and Russia could lead to a shortage in the oil market in the coming months, causing crude oil prices to reach their highest levels since November. Additionally, there are signs of economic improvement in China, supported by recent government stimulus measures, which may increase global demand for oil and put further upward pressure on prices.
The Federal Reserve will closely monitor energy prices as it decides on interest rates this week. If fuel costs remain high, it could contribute to inflation, potentially leading policymakers to keep interest rates elevated, which may have an impact on economic growth.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.