World oil prices "falter" before prospects in the Middle East

World oil prices edged up slightly on May 6 amid the risk that a ceasefire agreement between Hamas and Israel is unlikely to materialize.

At the close of the session, Brent crude oil prices increased by 37 cents, equivalent to 0.5%, to 83.33 USD/barrel. The price of US light sweet crude oil (WTI) also increased by 37 cents to 78.48 USD/barrel.

Last week, both major oil benchmarks posted their biggest weekly declines in three months, with Brent down more than 7% and WTI down 6.8%, as investors weighed weak US jobs data and the timing of a possible Federal Reserve interest rate cut.

Any ceasefire would help ease tensions in the Middle East, said Andrew Lipow, president of oil and gas company Lipow Oil Associates.

Meanwhile, Saudi Arabia’s announcement of an increase in its official selling price for crude oil sold to Asia, Northwest Europe and the Mediterranean for June 2024 also supported oil prices, signaling expectations of strong oil demand this summer.

Mr. Lipow predicts that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, also known as OPEC+, will announce plans to continue cutting production in the third quarter at meetings in June 2024.

In China, the world's biggest crude oil importer, services activity remained in growth mode for the 16th straight month, while new orders rose sharply and business sentiment improved steadily, boosting hopes of a sustained economic recovery.