Oil Prices Rebound Amid Expectations of Global Inventory Decline

Oil prices witnessed an uptick early on Thursday, rebounding from two consecutive sessions of losses. This rise is attributed to expectations that global oil inventories will continue to decline throughout the second quarter. Contributing factors include OPEC+ production cuts and Ukrainian assaults on Russian refineries, which are anticipated to sustain pressure on oil supplies.

The Joint Monitoring Ministerial Committee of OPEC is scheduled to have a meeting next week. Despite this upcoming meeting, adjustments to production quotas are not anticipated. The current voluntary production cuts by OPEC+, totaling 2.2 million barrels per day, are expected to remain effective until at least the end of June, with the possibility of an extension. However, any decisions regarding these cuts are likely to be deferred until the OPEC ministerial meeting in June.

The impact of Ukrainian attacks on Russian refineries is notably supporting product prices, as evidenced by gasoline futures hovering near six-month highs. The attacks have resulted in reduced Russian exports due to refinery damage.

While recent market reactions have led to fluctuations in oil prices, the future trajectory of these prices is dependent on continuous fundamental support. If the market conditions persist, oil prices are poised to potentially reach the $84 mark. This anticipation is based on traders and analysts closely monitoring supply and demand dynamics, alongside evaluating the implications of OPEC+ policies.