Oil prices are falling on Monday amid a general outflow of investors’ funds from risky assets due to signals of a new wave of crisis in the Chinese real estate market.
The US dollar is strengthening, which reduces the attractiveness of investments in commodities. The ICE dollar index is up 0.12% during trading.
The cost of October futures for Brent crude oil on the London ICE Futures exchange at 8:10 a.m. on Monday is $85.97 per barrel, which is $0.84 (0.97%) lower than the price at the previous session’s close. On Friday, these contracts rose by $0.41 (0.5%) to $86.81 per barrel.
The price of September futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) fell by $0.85 (1.02%) to $82.34 per barrel by this time. As a result of the previous trading, the value of these contracts increased by $0.37 (0.5%) to $83.19 per barrel.
Last week, Brent rose in price by 0.7%, WTI – by 0.5%. Both grades finished in the black for the seventh week in a row due to fears of an oil shortage on the global market. Expectations that the US economy will be able to avoid recession despite the Federal Reserve tightening monetary policy supported demand forecasts. At the same time, the reduction in oil supplies from Saudi Arabia to the global market raises fears of a reduction in supply.
“Traders have been overly focused on the economic situation in the United States, ignoring the serious problems in Europe and China,” said Vanda Insights founder Vandana Hari. – “It’s about time they came back to reality.
Prices of benchmark oil grades are down weakly on Friday morning after a sharp decline the previous day.
The price of October Brent futures on London’s ICE Futures exchange is at $86.25 a barrel by 8:10 a.m. Q4, down 15 cents (0.17%) from the previous session’s close. On Thursday, these contracts fell in price by $1.15 (1.3%) – to $86.24 per barrel.
Quotes of futures for WTI crude oil for September at the electronic trading of the New York Mercantile Exchange (NYMEX) by the specified time decreased by 14 cents (0.17%) and amounted to $82.68 per barrel. At the end of the last session they fell by $1.58 (1.9%) – to $82.82 per barrel.
Earlier this week, both grades hit multi-month highs. Despite declines the day before, they may end in the plus side for the seventh straight week on expectations of fuel shortages in the global market.
“The oil market has been overbought after rallying for weeks, but OPEC+ production cuts and improving demand outlook remain positive factors,” said CMC Markets analyst Tina Teng.
Meanwhile, OPEC left in force its previous forecast, which envisioned growth in global oil demand in 2023 by 2.44 million bpd to 102.01 million bpd. Next year, it will increase by another 2.25 million bpd to 104.25 million bpd, the organization expects.
“Sustained global economic growth amid continued improvements in China is projected to boost oil consumption in 2024,” OPEC said.
Oil prices are moderately lower on Monday morning, holding near four-month highs on expectations of an imminent fuel shortage in the global market.
The price of October Brent futures on London’s ICE Futures exchange is at $86.15 a barrel by 8:15 a.m. Q1, down 9 cents (0.1%) from the previous session’s close. Last Friday, these contracts rose by $1.1 (1.3%) to $86.24 per barrel.
Quotes of futures for WTI crude oil for September at the electronic trading of the New York Mercantile Exchange (NYMEX) by the specified time decreased by 6 cents (0.07%) and amounted to $82.76 per barrel. At the end of the previous session they rose by $1.27 (1.6%) – to $82.82 per barrel.
Over the past week, Brent rose by 2.2%, WTI – by 2.8%, and both brands closed at their highs since April 12.
Saudi Arabia on Thursday announced the extension of an additional voluntary production cut of 1 million bpd for September. Thus, the country’s actual oil production level next month is expected to be 9 million bpd.
In addition, Russia will also continue to voluntarily cut supplies to external markets by 300,000 bpd in September, Deputy Prime Minister Alexander Novak said.
“We expect Brent to end the year near the $85 per barrel mark. Ultimately OPEC+ looks determined to limit supply. We also expect global oil demand to grow at a 2% annualized rate in the second half of 2023,” said Edward Gardner, commodity economist at Capital Economics.
Meanwhile, data from oilfield services company Baker Hughes showed that over the past week the number of active oil rigs in the U.S. fell by 4 units to 525.
Oil prices are moderately higher on Friday morning after a strong rise at the end of the previous session, triggered by the decision of Saudi Arabia and Russia to extend supply cuts.
The price of October Brent futures on the London-based ICE Futures exchange at 8:01 a.m. Q1 is $85.26 per barrel, up 12 cents (0.14%) from the previous session’s close. On Thursday, these contracts rose in price by $1.94 (2.3%) – to $85.14 per barrel.
Quotes of futures for WTI for September at the electronic trading of the New York Mercantile Exchange (NYMEX) by the specified time rose by 17 cents (0.21%) and amounted to $81.72 per barrel. At the end of the previous session they rose by $2.05 (2.6%) – to $81.55 per barrel.
Both grades may end in the plus for the sixth week in a row.
Riyadh extends an additional voluntary cut in oil production by 1 million barrels per day for September, the kingdom’s state news agency reported, citing an official source in the energy ministry. Thus, the actual level of oil production in Saudi Arabia next month is expected to be 9 million bpd.
This reduction is in addition to the announced in April limitation of production by 500 thousand b / s, which will last until the end of 2024.
Investors are waiting for the meeting of the OPEC+ Ministerial Monitoring Committee (JMMC) on Friday, although it is unlikely to recommend any changes in production policy, MarketWatch writes.
Prices for oil of benchmark grades are rising weakly in trading on Thursday.
A day earlier, the market showed the most significant decline in more than a month, despite a record reduction in fuel inventories in the U.S. last week.
Quotes for October Brent crude futures on the London-based ICE Futures exchange as of 7:58 KV are at $83.26 per barrel, up $0.06 (0.07%) from the previous session’s closing price. On Wednesday, these contracts fell $1.71 (2%) to $83.2 per barrel.
The price of WTI crude oil futures for September at the electronic trading of the New York Mercantile Exchange (NYMEX) in the morning rose by $0.04 (0.05%) to $79.53 per barrel. At the end of the previous session they fell in price by $1.88 (by 2.3%) – to $79.49 per barrel.
Oil reserves in the U.S. last week decreased by 17.049 million barrels – to 439.77 million barrels, reported the country’s Department of Energy. Gasoline reserves increased by 1.48 million barrels, distillates – decreased by 796 thousand barrels.
Analysts surveyed by S&P Global Commodity Insights on average had forecast a 3.7 million barrel decline in oil reserves, a 1 million barrel decline in gasoline and a 400,000 barrel decline in distillates.
“Oil prices have fallen as the macroeconomic backdrop is killing sentiment,” believes Edward Moya, senior analyst at Oanda, implying, among other things, a downgrade of the US credit rating by Fitch. Also weighing on the oil market is the strong dollar, he told MarketWatch.
According to Matt Smith, lead oil analyst for the Americas at Kpler, the combination of robust oil exports and refinery activity has led to the sharpest decline in U.S. oil inventories on record, he said. “The peak of summer refining coincided with very strong exports at the end of the month, and we shouldn’t expect such large” changes in reserves in the future, he believes.
Oil prices are actively rising on Wednesday morning after declining at the end of the previous session, traders are evaluating signals of a sharp decline in oil inventories in the United States.
The price of October Brent futures on London’s ICE Futures exchange by 8:01 a.m. Wednesday is $85.59 a barrel, up 68 cents (0.8%) from the previous session’s close. On Tuesday, these contracts fell in price by $0.52 (0.6%) – to $84.91 per barrel.
Quotes of futures for WTI crude oil for September at the electronic trading of the New York Mercantile Exchange (NYMEX) by the specified time rose by 69 cents (0.85%) and amounted to $82.06 per barrel. At the end of the previous session they decreased by $0.43 (0.5%) – to $81.37 per barrel.
A negative factor for the oil market on Tuesday was the strengthening of the dollar, as it increases the cost of commodities for holders of other currencies. The index calculated by ICE, which shows the dollar’s performance against six major world currencies, rose 0.4% the day before.
“The rally in the oil market is ready to take a pause amid declining stock indices in the U.S. and a stronger dollar,” said Edward Moya, senior analyst at Oanda.
However, oil remains attractive to investors and buyers are likely to actively purchase contracts on drawdowns, he added.
Meanwhile, data from the American Petroleum Institute (API) released the previous day showed that US oil inventories collapsed by 15.4 million barrels last week. If the data is confirmed in the official figures from the Energy Department, which will be released at 5:30 p.m. Wednesday, the drop will be a record since 1982.
