Oil prices stabilize, Wall Street expects OPEC+ to extend cuts

Crude oil futures (CL=F, BZ=F) stabilize on a surprise inventory drop. Yahoo Finance Senior Reporter Ines Ferré joins Catalysts to discuss oil price trends seen in May so far as Wall Street anticipates OPEC+ to extend its production cuts.

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This post was written by Luke Carberry Mogan.

Video Transcript

Our oil prices edging higher as a bigger draw down in inventories in the US and Chinese import data help support crude in today’s trade.Yahoo finances in S a has more on that story for us and, yeah, Shana, those higher import data that coming out of China signalling demand growth.And that’s partly why you are seeing oil prices higher.We also have been seeing falling inventories here in the US, so that data yesterday sent oil higher.But taking look at WT I.It’s just below $80 a barrel and Brent just above $84 a barrel.If I pull out a chart a two month chart, you can see that since the peak in April on April 5th, you saw oil coming down about 8%.That’s a pretty big drop in a short amount of time, and oil tends to overshoot and overcorrect as well.So there are some analysts that said that we are in too much correction territory, so you can expect to see a little bit of a bounce when it comes to oil.But nonetheless, Goldman Sachs yesterday put out a note saying that they are expecting plus and their June meeting to extend their production cuts now, and all eyes are really on that oil alliance to see where they go with their production cuts beyond June.The expectation is that they will extend them because Brent right now is trading at 84.But the range that a lot of analysts are seeing for the second half of the year is around 85 is between 75 and 9090 is really the ceiling.So basically saying that, uh, OPEC plus doesn’t want, uh, oil to go too much pa past 90 because then you cause a recession.So nonetheless, we are seeing, uh, Brent 84.And the expectation is that that ceiling for Brent is going to be 90 guys.