Oil prices are down on Thursday after a strong rise the day before on data on a sharp decline in U.S. inventories.
The value of August Brent futures on London’s ICE Futures Exchange stood at $73.57 a barrel by 8:10 a.m. Thursday, down $0.46 (0.62%) from the previous session’s close. Those contracts rose $1.77 (2.5%) to $74.03 a barrel on Wednesday.
The price of WTI crude futures for August at NYMEX fell by $0.39 (0.56%) to $69.17 per barrel by that time. The day before the stocks went up $1.86 (2.8%) to $69.56 per barrel.
Last week crude inventories in the U.S. fell by 9.6 million barrels to 453.69 million barrels, according to the Energy Department. Experts polled by S&P Global Commodity Insights had on average forecast a less significant decline of 4.8 million barrels.
“The decline in U.S. inventories is largely due to an increase in oil exports,” said DTN chief analyst Troy Vincent, quoted by Market Watch. – This is occurring despite a decline in U.S. refinery activity.”
Stocks at the terminal in Cushing, which stores crude oil traded on the NYMEX, increased over the past week by 1.21 million barrels, according to the Energy Department.
The oil market ended the second quarter of 2023 in the negative due to the slower-than-expected recovery of the Chinese economy, as well as fears of recession in the U.S. and Europe amid a tightening of monetary policy by the Federal Reserve and the European Central Bank.
Fed Chief Jerome Powell said at the ECB forum in Sintra on Wednesday that most U.S. central bank leaders see the possibility of at least two more hikes in the prime rate.
Oil prices are rising Wednesday on data from the American Petroleum Institute (API) on sharper than expected U.S. inventory declines.
According to API, they fell by 2.41 million barrels in the week ended June 23. Experts polled by Trading Economics forecasted an average decline of 1.47m barrels.
The official data on oil reserves for the previous week will be released by the U.S. Department of Energy on Wednesday at 5:30 p.m.
Brent August futures on London’s ICE Futures Exchange stood at $72.59 a barrel by 8:10 a.m. Wednesday, up $0.33 (0.46%) from the previous session’s close. Those contracts fell $1.92 (2.6%) to $72.26 a barrel on Tuesday.
The price of WTI futures for August at electronic trades of NYMEX grew by $0.22 (0.32%) to $67.92 per barrel by that time. The day before these contracts fell by $1.67, or 2.4%, to $67.7 per barrel.
The oil market ends the second quarter of 2023 in the negative, due to the slower-than-expected recovery of the Chinese economy after the lifting of quarantine restrictions. Fears of recession in the U.S. and Europe amid tightening monetary policy by the Federal Reserve and the European Central Bank also put pressure on the market.
Statistical data released on Tuesday, however, show that the U.S. economy remains resilient despite the Federal Reserve’s restrictive policy. The nation’s consumer confidence index rose in June to its highest since January 2022, and new-home sales in May were the highest since last February.
“The strong economic statistics we saw yesterday increase the likelihood of a further Fed rate hike,” notes Warren Patterson, who is in charge of commodities strategy at ING Groep NV. – This is the moment when good news is bad news for the market.
Oil prices are rising on Tuesday morning after a moderate increase in the previous session.
The value of August futures for Brent at London’s ICE Futures Exchange is $74.57 a barrel by 8:06 Moscow time, which is $0.39 (0.53%) above the previous session’s closing price. Those contracts rose $0.33 (0.5%) to $74.18 a barrel on Monday.
WTI futures for August crude oil grew by $0.45 (0.65%) to $69.82 per barrel at electronic trades of NYMEX. The day before those contracts grew $0.21 (0.3%) to $69.37 a barrel.
Traders continue to estimate the consequences of events in Russia last weekend, Market Watch notes. In particular, the market fears that destabilization of domestic political situation may lead to a reduction in oil exports from the country, CFRA Research analyst Stuart Glickman wrote.
In addition, market participants are watching the macroeconomic statistics from China, where the economy is growing weaker than expected, which in turn negatively affects energy prices, said Colin Cieszynski, senior strategist at SIA Wealth Management.
Largely because of the Chinese factor, as well as the Federal Reserve’s tight monetary policy, WTI could end up declining for a second straight quarter, something that hasn’t happened since 2019.
Oil prices continued to fall on Friday and ended the week lower amid continued monetary tightening by global central banks.
The Bank of England and Norwegian Central Bank raised their benchmark rates 50 basis points (bps) the previous day, while the Swiss National Bank raised them by 25 bps.
In addition, Federal Reserve (Fed) Chairman Jerome Powell made it clear that the U.S. Central Bank may raise the rate twice more this year.
“Global central banks continue to push for slower inflation, even as the measures they are taking to do so are pushing the economy into recession, and the oil market is responding accordingly,” notes CMC Markets U.K. analyst Michael Hewson.
“Sharper-than-expected rate hikes by the Bank of England and the Norwegian central bank, as well as hawkish signals from the Fed, are negatively affecting traders’ expectations for oil demand prospects,” Hewson is quoted by Market Watch.
The price of August futures for Brent crude oil on London’s ICE Futures exchange is $73.42 a barrel by 8:15 a.m. on Friday, down $0.72 (0.97%) from the previous session’s closing price. Those contracts fell $2.98 (3.9%) to $74.14 a barrel on Thursday.
The price of WTI crude futures for August at NYMEX fell by $0.73 (1.05%) to $68.78 per barrel by that time. The day before these contracts fell by $3.02 (4.2%) to $69.51 per barrel.
Data of U.S. Department of Energy issued on Thursday showed a reduction of commercial oil reserves in the country last week by 3.83 mln barrels to 463.29 mln barrels. Experts on average had forecast a decline by 450,000 barrels.
Gasoline stocks in the states last week rose by 479,000 barrels and distillates by 434,000 barrels.
Oil prices are falling on Tuesday on signals that the stimulus measures in China are not enough to push the country’s economy and demand for oil to robust growth.
The day before, analysts at several investment banks, including Goldman Sachs Group Inc. worsened forecasts for the Chinese economy.
The People’s Bank of China (PBOC, the country’s central bank) on Tuesday lowered its benchmark one-year lending rate (LPR) by 10 basis points (bps) to 3.55% per year. The rate on five-year loans was lowered to 4.2 percent from 4.3 percent per annum, the NBK said in a statement. The rates were lowered for the first time since August 2022.
August Brent crude futures on London’s ICE Futures exchange were at $75.82 a barrel by 8:20 a.m. Tuesday, down $0.27 (0.35%) from the previous session’s closing price. Those contracts fell $0.52 (0.7%) to $76.09 a barrel on Monday.
The price of WTI crude futures for July at electronic trades of NYMEX fell by $0.9 (1.25%) to $70.88 per barrel by that time. The day before, WTI was not traded in the main due to a holiday in the U.S.
Oil prices may end in the negative for the second quarter in a row on the background of sufficient supply in the market and expectations of weakening demand in the context of tightening of monetary policy by the world’s major central banks.
Prices for oil of reference brands are declining Monday morning after the previous session they rose to their highest marks since June 7.
Negative impact on investors’ moods is given by concerns about the growth rate of the global economy, says Trading Economics. In particular, several major Western banks downgraded forecasts for GDP growth in China, the world’s largest importer of oil, based on recently published statistical data showing a slowdown in economic recovery in the country after the lifting of pandemic restrictions.
Brent crude futures for August delivery on London’s ICE Futures Exchange stood at $75.5 a barrel as of 7:56 a.m. ET, down $1.11 (1.45%) from the close of the previous session. Those contracts rose $0.94 (1.2%) to $76.61 a barrel on Friday.
The price of futures for WTI crude oil for July at electronic trading on the New York Mercantile Exchange (NYMEX) fell by $1.1 (1.5%) to $70.68 per barrel on Friday morning. At the end of previous session the contracts increased by $1.16 (1.6%) to $71.78 per barrel.
Over the past week, Brent gained 2.4% and WTI gained 2.3%, according to Dow Jones Market Data. This was the most significant weekly rise since early April.
