DUBAI — While oil prices rose above $75 a barrel on Friday, they’re facing a four-quarter decline. The impact is exacerbated by worries over an economic slowdown, slowing but still high inflation and declining fuel demand. 

Benchmark Brent Crude futures for September were up 82 cents or 1.1% at $75.33 a barrel, according to Reuters on Friday. The less-traded front-month contract expiring Friday was up 52 cents at $74.86 a barrel. 

The contract was on its way to a 6% decline in three months until the end of June, when prices saw a fourth straight quarterly dip. The shift is due to a combined effect of rising interest rates in major economies, inflationary impacts and the slower-than-expected recovery of Chinese manufacturing and consumption in recent months. 

Earlier this month, Saudi Arabia’s Crown Prince Mohammed bin Salman held a phone call with Russian President Vladimir Putin to discuss increasing economic ties as well as balancing oil demand and prices. In the ministerial meeting of the Organization of the Petroleum Exporting Countries' (OPEC+) earlier this month, Saudi Arabia extend its voluntary 500,000 barrels per day (bpd) cut until 2024. 

Matthew Bey, a senior global analyst at RANE Network, believes that despite OPEC+ and Saudi Arabia’s attempts to prop up oil markets, they will continue to face challenges moving forward.

“Oil markets’ unresponsiveness to Saudi Arabia’s voluntary production cut announced in June and last year’s OPEC+ production cut demonstrates how market conditions are currently being affected by other factors and are likely to do so over the rest of the year,” he told Al-Monitor. The global economic slowdown and Western Central Bank policies are the two of the main factors to watch for, added Bey.

According to HSBC analysts, reported Reuters, "Despite the announcements of two fresh rounds of cuts from OPEC+/Saudi Arabia, crude prices have largely remained below $80 a barrel as the market has been driven less by fundamentals and more by macroeconomic concerns." 

OPEC+ members made cuts totaling 3.66 million bpd since late last year. The total includes voluntary cuts of 2 million bpd that started in November of 2022 and an additional 1.66 million bpd reduction in April of this year.

The surprise April cut by the OPEC+ alliance saw oil prices rise by 5%. Brent crude rose 5.31% to $84.13 a barrel on April 3, its sharpest price increase in almost a year.  

The exporter group's cuts have had a broader impact on the market. One example is the cargo trade from the Middle East. Chinese refiner Sinopec’s trading arm Unipec sold heavily in June — a total of 64 cargo shipments of which the bulk are Omani crude — according to data from Refinitiv Oil Research, in what is seen as a move to counter the price increase of Middle East crudes, which have become more expensive in comparison to those from the Atlantic Basin as OPEC+ output cuts remain. 

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