Oil prices are rising Wednesday on signals of declining U.S. inventories, continuing a rebound that began after an unexpected production cut by a number of OPEC+ countries last Sunday.
American Petroleum Institute (API) data released Tuesday night showed a 4.35 million-barrel decline in U.S. oil inventories for the week ending March 31.
The official data on U.S. energy stocks for the previous week will be published by the U.S. Department of Energy on Wednesday at 5:30 p.m. The previous week the country’s oil reserves decreased by 7.49 million barrels.
June Brent crude futures on London’s ICE Futures exchange stood at $85.36 a barrel by 8:05 a.m. Wednesday, up $0.42 (0.49%) from the previous session’s closing price. Those contracts rose $0.01 to $84.94 a barrel on Tuesday.
The price of WTI futures for May oil grew by $0.36 (0.45%) up to $81.07 per barrel at electronic trades of NYMEX by that time. At the end of previous session the cost of contracts grew by $0.29 (0.4%) to $80.71 per barrel, the highest since January 26.
Oil prices rose nearly 7% during the first two sessions of the week. On Sunday evening, nine of the 20 OPEC+ countries announced voluntary production cuts from May to the end of the year, in addition to the commitments they had made at last October’s meeting to adjust oil production (a total reduction of 2 mln bpd to August 2022 levels).
Additional voluntary production adjustments by OPEC+ countries will total 1.66 mln bpd.
The unexpected decision of a number of OPEC+ states led to the revision of forecasts for oil prices by a number of experts and caused a new wave of concerns about inflation, Bloomberg notes.
Oil prices continue to rise on Tuesday after a year’s biggest jump in the previous session on the decision of several OPEC+ countries, including Saudi Arabia, to further cut production.
June Brent crude futures on London’s ICE Futures exchange are at $85.32 a barrel by 8:05 a.m., up $0.39 (0.46%) from the previous session’s closing price. Those contracts rose $5.04 (6.3%) to $84.93 a barrel on Monday.
The price of WTI crude oil futures for May at electronic trades of NYMEX grew by that time by $0.38 (0.47%) up to $80.80 per barrel. The contract value grew by $4.75 (6.3%) to $80.42 per barrel at the end of previous session.
The rise in value of Brent on Monday was the highest since March 21, 2022, WTI – since April 12 last year, according to Dow Jones.
On Sunday evening, 9 of the 20 OPEC+ countries announced voluntary production cuts from May through the end of the year, in addition to commitments to adjust oil production made at last October’s meeting (a total reduction of 2 million bpd to August 2022 levels).
The additional voluntary production adjustment by OPEC+ countries will total 1.66 million bpd, according to a statement released after the OPEC+ monitoring committee meeting on Monday.
The unexpected decision of some OPEC+ states led to a revision of forecasts for oil prices by a number of experts and triggered a new wave of concerns over inflation, Bloomberg notes.
Analysts at Goldman Sachs raised the price forecast for Brent for December 2023 to $95 from $90 and for December 2024 to $100 from $95 per barrel.
Rystad Energy experts admit that the price of Brent may rise to the region of $110 per barrel this summer.
Oil prices show a strong rebound Monday morning after a number of OPEC+ alliance countries, including Russia and Saudi Arabia, announced additional production cuts.
June Brent futures on London’s ICE Futures exchange stood at $83.82 a barrel by 8:10 a.m. Q, up $3.93 (4.92%) from the previous session’s closing price. At the close of trading last Friday those contracts grew by $0.50 (0.6%) to $79.77 per barrel.
The price of WTI crude oil futures for May at the electronic trading on the New York Mercantile Exchange (NYMEX) is $79.51 per barrel by that time, which is $3.84 (5.07%) above the final value of the previous session. The contract rose by $1.3 (1.8%) to $75.67 a barrel on Friday.
Brent dropped 4.9% in March and 7% in the first quarter, writes MarketWatch. Futures on WTI have lost 1.8% and 5.7%, respectively, and the monthly decline was the fifth consecutive for the North American brand.
On Sunday evening, 8 of the 20 OPEC+ countries announced a voluntary reduction in oil production from May until the end of the year. The announcement was made ahead of Monday’s meeting of the OPEC+ monitoring committee (JMMC).
Interfax estimated the total reduction in oil production to be about 1.657 million bpd, of which 500,000 bpd would come from the deal’s leaders, Russia and Saudi Arabia. Non-OPEC countries, such as Kazakhstan, are going to reduce production by 78 thousand bpd, and Oman – by 40 thousand bpd. Among the OPEC members, the production is going to be reduced by 144,000 bpd in the UAE, 128,000 bpd in Kuwait, 211,000 bpd in Iraq, 48,000 bpd in Algeria and 8,000 bpd in Gabon.
“Producers are clearly unhappy with the recent drop (in oil prices – IF), which was more speculative than caused by fundamental factors. They are likely to be able to get quotes back above $80 a barrel, plus they are trying to respond preemptively to a smaller-than-expected increase in global oil demand in the coming months,” Saxo Bank analysts Ole Hansen said in an interview with MarketWatch.
“The Saudi oil minister likes to take the market by surprise, especially when it could hurt downside speculators,” he added.
Oil prices rise for the third session in a row on data about reduction of fuel reserves in the USA and easing of fears about the crisis in the banking sector, writes MarketWatch.
The cost of May futures for Brent at London’s ICE Futures Exchange is $78.83 a barrel by 8:05 a.m., which is $0.18 (0.23%) above the previous session’s closing price. Those contracts rose $0.53 (0.7%) to $78.65 a barrel at the close of trading on Tuesday.
The price of WTI futures for May at electronic trades on the New York Mercantile Exchange (NYMEX) is $73.64 per barrel by that time, which is $0.44 (0.6%) above the final value of the previous session. The day before, the contract rose $0.39 (0.5%) to $73.2 a barrel.
“Market participants were trying to assess what effect the collapse of Silicon Valley Bank and the merger of Credit Suisse and UBS would have on the overall market,” wrote Price Futures Group senior analyst Phil Flynn. – However, the effect could be positive, as the banking crisis could force the world’s central banks to slow the pace of rate hikes.”
The American Petroleum Institute (API) data released on Tuesday night, Wednesday, indicated a 6.08 million-barrel decline in U.S. oil inventories for the week ended March 24. Gasoline inventories fell 5.89 million barrels and distillates rose 548,000 barrels.
The official report on energy reserves in the United States will be released at 5:30 pm on Wednesday. Analysts polled by Trading Economics expect a slight increase in oil reserves by about 100,000 barrels.
Oil prices growth was also pushed up by the decision of the International Chamber of Commerce arbitration court in a lawsuit against Turkey, which challenged the export of oil from Kurdistan. The export of oil from the North of Iraq was halted on March 25. The volume of transportation through Turkey was about 400 thousand barrels of oil per day.
Oil prices of benchmark grades are declining in trading on Tuesday after reaching their highest levels in the last two weeks a day earlier.
At 8:01 a.m., May futures for Brent at ICE Futures Exchange in London stood at $77.8 per barrel, down $0.32 (0.4%) from the previous session’s close. Those contracts rose by $3.13 (4.2%) to $78.12 per barrel at Monday’s trading.
WTI futures for May at electronic trades of NYMEX decreased by $0.04, to $72.77 per barrel. Contracts rose $3.55 (5.1%) to $72.81 a barrel in the previous session.
“The crystal ball, which was clouded by the banking crisis, now shows an opportunity for profit in the oil market,” believes Manish Raj, managing director of Velandera Energy Partners. According to him, “After the disorderly sell-off in mid-March, cooler thinking has begun to prevail as traders see falling oil prices as a good entry point into the market,” MarketWatch reports.
However, analysts continue to fear the possibility of a recession in the U.S. economy, which is weighing on the market, Trading Economics reported.
Oil prices show moderate growth on Monday morning after a strong rise last week.
The value of May futures for Brent on London’s ICE Futures Exchange stood at $75.12 a barrel by 8:07 a.m., $0.13 (0.17%) above the previous session’s closing price. At the close of trading last Friday those contracts fell by $0.92 (1.2%) to $74.99 per barrel.
The price of WTI futures for May at the electronic trading on the New York Mercantile Exchange (NYMEX) is $69.4 per barrel by that time, which is $0.14 (0.2%) above the final value of the previous session. The contract fell by $0.7 per barrel to $69.26 last Friday.
Brent gained 2.8% and WTI gained 3.5% last week, slightly recovering from a collapse to multi-year lows a week earlier.
“Oil prices, largely a victim of volatility in global markets, managed to recover in the short term, although Brent is still worth 10% less than it was at the beginning of the year,” said Barbara Lambrecht, a commodities analyst at Commerzbank. – On the one hand, this is due to still high risks and on the other hand to unexpectedly high supply levels.”
Stephen Innes of SPI Asset Management pointed to good indicators on the Chinese economy and predicted that the oil market may show a small deficit by mid-year.
Meanwhile, the number of active oil rigs in the U.S. rose 4 units to 593 last week, oil services company Baker Hughes said. The week before, the figure fell to a nine-month low.
