Oil prices were stable in trading on Wednesday before the meeting of the OPEC+ Ministerial Monitoring Committee (JMMC).
The price of December futures for Brent on the London ICE Futures exchange at 8:10 a.m. on Wednesday is $90.88 per barrel, which is $0.04 (0.04%) lower than at the close of the previous session. On Tuesday, the price of these contracts increased by $0.21 (0.2%) to $90.92 per barrel.
November futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) fell by $0.02 (0.02%) to $89.21 per barrel by this time. As a result of previous trading, the value of these contracts increased by $0.41 (0.5%) to $89.23 per barrel.
The JMMC meeting, which will assess the situation on the global oil market, will be held online on Wednesday.
Traders’ attention is also focused on the weekly report of the US Department of Energy on energy reserves in the country, which will be released at 17:30 pm.
Experts surveyed by S&P Global Commodity Insights, on average, predict a 1.4 million barrel decline in US oil inventories last week. They also expect distillate stocks to fall by 1.6 million barrels, while gasoline stocks will remain unchanged.
Estimates by the American Petroleum Institute (API), released on Tuesday night, showed a 4.21 million barrel decline in US oil inventories in the week ended September 29.
Benchmark oil prices are falling on Tuesday morning after hitting three-week lows the day before.
The price of December futures for Brent on the London ICE Futures exchange at 8:17 a.m. is $89.74 per barrel, which is $0.97 (1.07%) lower than at the close of the previous session. On Monday, these contracts fell by $1.49 (1.6%) to $90.71 per barrel.
Quotes for November futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) by this time decreased by $0.74 (0.83%) to $88.08 per barrel. At the end of the previous session, they fell by $1.97 (2.2%) to $88.82 per barrel.
The main negative factor for commodity markets on Monday was the strengthening of the dollar on the news that the US government had managed to avoid a shutdown, as well as fears of new Federal Reserve rate hikes. The ICE index, which measures the dollar against six major world currencies, is at its highest level since last November.
“The decline in oil prices has very little to do with fundamentals and is driven by rising US government bond yields and a stronger dollar,” wrote Warren Patterson of ING. – “I think that the quotes have the potential for further growth.
Oil grew strongly in the summer and is still supported by concerns about fuel supply on the global market, said Colin Czeszynski, senior market strategist at SIA Wealth Management. “At the same time, from a technical point of view, oil is overbought, and it seems to be entering a correction phase,” he added.
Investors’ attention is now focused on the meeting of the OPEC+ Ministerial Monitoring Committee (JMMC), which will be held on Wednesday.
Oil prices are slightly rising in trading on Monday.
The cost of December futures for Brent on the London ICE Futures exchange at 8:15 a.m. on Monday is $92.32 per barrel, which is $0.12 (0.13%) higher than at the close of the previous session. On Friday, the price of these contracts fell by $0.9 (1%) to $92.2 per barrel.
Futures for WTI for November in electronic trading on the New York Mercantile Exchange (NYMEX) rose by $0.14 (0.15%) to $90.93 per barrel by this time. As a result of the previous trading, the value of these contracts decreased by $0.92 (1%) to $90.79 per barrel.
Concerns about a potential supply shortage in the market supported oil prices in September. Many analysts are still confident that prices will continue to move up to $100 per barrel, Market Watch notes.
Brent rose by 9.7% last month and by 27.3% in the third quarter, while WTI rose by 8.6% and 28.5%, respectively.
“The impetus for price growth, driven by fears of a supply shortage in the market, had exhausted itself by the end of last week,” said Vanda Insights founder Vandana Hari. – “Now we are likely to see a consolidation phase until new market drivers emerge.
This week (October 2-5), the 27th ADIPEC 2023 International Oil and Gas Exhibition and Conference will be held in Abu Dhabi (UAE), which may give new signals about what to expect in the oil market in the near future. Among the speakers at the conference are OPEC Secretary General Haisam al-Ghais and UAE Energy Minister Suheil al-Mazroui.
Benchmark oil prices continue to rise Wednesday morning after climbing the previous day, driven by reduced concerns about the global economy and growing worries about fuel shortages on the world market.
The price of November futures for Brent on the London-based ICE Futures exchange at 8:16 a.m. Wednesday is $94.91 per barrel, up $0.95 (1.01%) from the previous session’s close. On Tuesday, these contracts rose by $0.67 (0.7%) to $93.96 per barrel.
Quotes of futures for WTI crude oil for November at the electronic trading of the New York Mercantile Exchange (NYMEX) by the specified time rose by $0.96 (1.06%) and amounted to $ 91.35 per barrel. At the end of the last session they rose by $0.71 (0.8%) – to $90.39 per barrel.
Oil is supported by fears that demand will greatly exceed supply, which intensified after the decisions of Saudi Arabia and Russia to extend voluntary production cuts.
“It seems nothing can derail the oil price rally,” said Edward Moya, senior market analyst at OANDA. – Energy traders are quick to recognize the bullish trend, and it will take much more than a strong dollar and weakening demand to break it.”
Market participants are also evaluating signals about changes in U.S. energy inventories.
According to the American Petroleum Institute (API), last week oil reserves in the States increased by 1.59 million barrels. A week earlier, the reserves fell by 5.25 million barrels.
The official data from the Energy Department will be released at 5:30 p.m. Q1 on Wednesday. Analysts surveyed by S&P Global Commodity Insights forecast that the data will indicate a reduction in oil reserves by 320 thousand barrels, gasoline – by 120 thousand barrels, distillates – by 1.3 million barrels.
Oil prices continued to decline on Tuesday amid concerns about the global economy and high interest rates in the United States.
November futures for Brent on the London ICE Futures exchange by 14:47 by $0.75 (0.8%) to $92.54 per barrel.
Quotations for November futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) by this time decreased by $0.77 (0.86%) to $88.91 per barrel.
Earlier in September, oil prices reached annual highs on the news that Saudi Arabia and Russia were extending voluntary production cuts.
However, last week, the Federal Reserve made it clear that interest rates could be raised again and could remain at high levels for a long time. In this regard, uncertainty about the outlook for oil demand has recently increased.
Meanwhile, “oil supply is expected to lag behind demand for the foreseeable future, and therefore periods of weakness in quotations, even severe weakness, are unlikely to last long,” wrote Tamas Varga, an analyst at PVM Oil Associates.
Douglas Lawler, head of Continental Resources, believes that oil prices could reach $120-150 per barrel, provided that production does not start to grow.
On Tuesday, the American Petroleum Institute (API) will publish data on the weekly dynamics of oil reserves in the country, and on Wednesday, the Ministry of Energy will present official statistics. Traders on average expect a reduction in oil reserves by 1.65 million barrels over the week, according to Trading Economics.
Benchmark oil prices continue to decline on Thursday morning, showing negative dynamics for the third consecutive session, despite data on the reduction of fuel stocks in the United States.
The price of November futures for Brent on the London ICE Futures exchange at 8:09 a.m. is $92.86 per barrel, which is $0.67 (0.72%) lower than at the close of the previous session. On Wednesday, these contracts fell by $0.81 (0.9%) to $93.53 per barrel.
Quotations for November futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) by this time decreased by $0.68 (0.76%) to $88.98 per barrel. At the end of the previous session, they fell by $0.82 (0.9%) to $89.66 per barrel.
Commercial oil inventories in the United States last week decreased by 2.14 million barrels, according to the weekly report of the country’s Energy Ministry. Analysts surveyed by Bloomberg had predicted a decline of 1.7 million barrels.
Meanwhile, gasoline stocks fell by 831 thousand barrels, and distillate stocks decreased by 2.87 million barrels. Experts expected an increase in gasoline stocks by 1.1 million barrels and an increase in distillate stocks by 1.05 million barrels.
Oil reserves at the Cushing terminal fell by 2.1 million barrels. Meanwhile, the US Strategic Petroleum Reserve (SPR) was replenished by 600 thousand barrels.
“We do believe that some consolidation is warranted before the next upside move,” Tariq Zaheer, managing partner at Tyche Capital Advisors, told MarketWatch.
With Russia and Saudi Arabia cutting oil production by the end of the year, it is only a matter of time before Brent prices rise to $100 per barrel, he added.
According to Zaheer, “the rise in oil prices may be hindered by high oil prices, as they will put pressure on demand.”
