Oil is moderately expensive on Tuesday morning.
The price of September Brent futures on London’s ICE Futures Exchange stands at $75.02 a barrel by 8:11 a.m., $0.37 (0.5%) above the previous session’s closing price. Those contracts fell $0.76 (1%) to $74.65 a barrel on Monday.
WTI futures for August crude oil grew by $0.36 (0.52%) to $70.15 per barrel at electronic trades on NYMEX. The day before these contracts went down by $0.85 (1.2%) to $69.79 per barrel.
On Monday, Saudi Arabia announced that it was extending its voluntary cut of oil production by 1 mln bpd for August. Thus, Saudi Arabia’s oil production will remain at around 9 million bpd in August.
Meanwhile, Russia, in an effort to balance the market, will voluntarily reduce supplies to oil markets by 500,000 bpd in August by reducing exports by a specified amount, Russian Deputy Prime Minister Alexander Novak told reporters.
Oil initially reacted to the news with moderate positivity, but it was not enough for a significant rally, Sevens Report Research analysts said.
A negative factor for the market was the news that the index of business activity in the U.S. manufacturing sector (ISM Manufacturing) fell to 46 points in June from 46.9 points a month earlier. Experts, the consensus forecast of which was quoted by Trading Economic, had expected the growth up to 47 points.
Meanwhile, the euro area manufacturing purchasing managers’ index (PMI) fell to 43.4 points this month, down from 44.8 points in May, according to final data from Hamburg Commercial Bank (HCOB) and S&P Global. Previously, it had reported a decline to 43.6 points. The final result indicates the sharpest deterioration in the sector since May 2020, Trading Economics wrote.
Oil quotations are weakly rising on Friday morning after a moderate rise in prices at the end of the previous session.
The value of August futures for Brent on London’s ICE Futures Exchange stood at $74.49 a barrel by 8:02 a.m., $0.15 (0.2%) above the previous session’s closing price. Those contracts rose $0.31 (0.4%) to $74.34 a barrel on Thursday.
The price of WTI crude futures for August at electronic trades of New York Mercantile Exchange (NYMEX) increased by that time by $0.01, to $69.87 per barrel. The day before these contracts rose $0.3 (0.4%) to $69.86 a barrel.
Oil gets support from strong statistical data from the U.S. and signals about reduction of fuel reserves in the country.
On the eve of the U.S. Department of Commerce raised its estimate of the country’s GDP growth in January-March to 2% in annual terms from the previously announced 1.3%.
A day earlier it became known that oil reserves in the States last week fell by 9.6 million barrels instead of the expected decline by 4.8 million barrels, according to experts polled by S & P Global Commodity Insights.
Expectations of further monetary policy tightening by the leading central banks of the world are restraining factor for oil quotations.
Fed chairman Jerome Powell said earlier this week that most U.S. central bankers see the possibility of at least two more hikes in the benchmark interest rate. For her part, European Central Bank President Christine Lagarde said there was a high probability of a rate hike in the eurozone in July.
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.
