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.
Benchmark crude oil prices are declining Friday morning after a significant increase a day earlier.
Traders are worried about the likelihood of further rate hikes by the Federal Reserve and the European Central Bank, which could have a negative impact on fuel demand.
Brent crude futures for August delivery on London’s ICE Futures Exchange stood at $75.49 per barrel as of 7:57 a.m., down $0.18 (0.2%) from the close of the previous session. Those contracts rose $2.47 (3.4%) to $75.67 a barrel on Thursday.
The price of WTI futures for July crude oil on the electronic trades of the New York Mercantile Exchange (NYMEX) fell on Friday morning by $0.16 (0.2%) to $70.46 per barrel. The contract value rose by $2.35 (3%) to $70.62 a barrel at the end of previous session.
The Fed’s management decided Wednesday not to change the prime rate range (5-5.25% per year), but signaled the likelihood of further increases this year to curb consumer price growth.
The ECB, as forecasted, raised all three key interest rates by 25 basis points at the end of Thursday’s meeting – to the highest levels in 22 years. At the same time, Bank President Christine Lagarde said that the set goals in the fight against inflation have not yet been achieved. According to her, the central bank is “very likely” to raise rates again in July.
Oil prices are falling Thursday on data about a significant increase in U.S. inventories and signals that the Federal Reserve (Fed) has not yet ended its cycle of monetary policy tightening, despite a break in the rate hike at its June meeting.
The U.S. central bank kept rates in the 5-5.25 percent annual range at the end of Wednesday’s two-day meeting. Median forecasts from Fed policymakers suggest the rate will be 5.6% by the end of 2023 and 4.6% by the end of 2024.
August Brent crude futures on London’s ICE Futures exchange are at $73.01 a barrel by 8:05 a.m. Thursday, down $0.19 (0.26%) from the previous session’s closing price. Those contracts fell $1.09 (1.5%) to $73.2 a barrel on Wednesday.
The price of WTI futures for July oil fell by $0.17 (0.25 percent) to $68.1 per barrel at electronic auctions of New York Mercantile Exchange (NYMEX) by that time. The contract value fell by $1.15 (1.7%) to $68.27 per barrel at the end of previous session.
The pressure on the market caused by an increase in stocks is exacerbated by risks of weakening demand as a result of Federal Reserve policies, said Mizuho Bank Ltd. Vishnu Varathan, cited by Market Watch.
U.S. commercial oil inventories rose 7.92 million barrels to 467.12 million last week, the Energy Department said Wednesday. Commodity gasoline reserves rose 2.11 million barrels and distillates rose 2.12 million barrels.
Stocks at the Cushing terminal, where Nymex-traded crude is stored, rose by 1.5 million barrels last week, to a two-year high.
