Oil prices rose on Friday despite concerns about the global economy and demand for energy resources after a rate hike in the U.S. and euro zone.
July Brent futures on London’s ICE Futures exchange stood at $73.21 a barrel by 8:04 a.m. Friday, up $0.71 (0.98%) from the previous session’s closing price. Those contracts rose $0.17 (0.2%) to $72.5 a barrel on Thursday.
The price of WTI futures for June oil grew by $0.63 (0.92%) up to $69.19 per barrel at electronic trades of NYMEX by that time. At the end of previous session the contracts went down by $0.04 (0.1%) to $68.56 per barrel, which was the lowest since March 20.
The day before, the European Central Bank expectedly raised all three key interest rates by 25 basis points (bps). Thus, the benchmark interest rate on loans now stands at 3.75%, the deposit rate at 3.25% and the rate on margin loans at 4%.
On Wednesday, the U.S. Federal Reserve also raised its key interest rate by 25 bps, its range now being the highest since 2007 at 5-5.25% per year. Meanwhile, the words about the necessity to further tighten the monetary policy disappeared from the press release on the results of the meeting.
In addition, it became known that Saudi Arabia in June will raise the price of oil with delivery to European countries, and for Asian buyers the fuel will become cheaper. Prices for oil with delivery in the U.S. next month will not change, with the exception of grade Arab Light, which will become cheaper by $0.5 per barrel, said state company Saudi Aramco.
Oil prices are stable in trading on Tuesday after declining the day before on increased fears of declining demand.
The price of July futures for Brent on London’s ICE Futures Exchange stood at $79.27 a barrel by 8:05 a.m. Tuesday, down $0.04 (0.05%) from the close of the previous session. Those contracts fell $1.02 (1.3%) to $79.31 a barrel on Monday.
The price of WTI futures for June oil grew by $0.02 (0.03%) to $75.64 per barrel at electronic trades of New York Mercantile Exchange (NYMEX) by that time. The contracts value has decreased by $1.12 (1.5%) to $75.66 per barrel at the end of previous session.
Investors are waiting for the Federal Reserve to raise its benchmark interest rate again this week, worried that further tightening of monetary policy in the U.S. will trigger a global recession, Market Watch noted.
China’s Purchasing Managers’ Index (PMI) for the manufacturing industry fell to a four-month low of 49.2 points in April from 51.9 points in March, data from China’s State Bureau of Statistics (SBS) showed. The value of the index below 50 points indicates a decline in activity in the sector. PMI in April fell below this mark for the first time since December.
In April Brent has fallen in price by 0.3% and WTI has risen by 1.5%.
Oil prices are declining on Tuesday afternoon after rising in the previous two sessions amid a stronger dollar. In addition, investors continue to evaluate the prospects for fuel demand.
The price of June Brent crude futures on London’s ICE Futures exchange stood at $82.18 a barrel by 3:17 p.m. Tuesday, down $0.55 (0.66%) from the previous session’s closing price.
The price of June WTI futures on the New York Mercantile Exchange (NYMEX) is down $0.51 (0.65%) to $78.25 a barrel by this time.
The DXY index, which shows the value of the U.S. dollar against six major world currencies, is up 0.2% in trading, making oil less attractive to holders of other currencies.
The market also fears further tightening of monetary policy by central banks, which could have a negative impact on global economic growth and demand for energy, writes Trading Economics.
Additional pressure on prices is reducing the profitability of processing at Asian enterprises. Analysts attribute the decline in profitability to, among other things, the increase in production at new refineries in the Middle East.
Oil prices of benchmark grades declined again on Monday.
Quotes rose on Friday, but at the end of the week they fell by more than 5%.
Traders are concerned that further tightening of monetary policy by the Federal Reserve and other major central banks could worsen the global economy and reduce the demand for fuel, Trading Economics said.
These factors more than offset optimism about China’s economic recovery after the lifting of strict restrictions imposed to curb the COVID-19 pandemic in late 2022, writes MarketWatch.
Amid a deteriorating economic backdrop and still hawkish behavior by the Federal Reserve, there are no real positive reasons for oil market growth, analysts believe Sevens Report Research
Brent June futures on London’s ICE Futures exchange stood at $80.53 per barrel by 8:05 a.m., down $1.13 (1.4%) from the close of the previous session. Those contracts rose $0.56 (0.7%) to $81.66 per barrel on Friday.
Price of futures on WTI crude oil for June at electronic trades of New York Mercantile Exchange (NYMEX) fell in the morning by $0.93 (1.2%) – down to $76.94 per barrel. At the end of previous session the cost of contracts rose by $0.5, or 0.7%, to $77.87 per barrel.
Last week the Brent quotations fell by 5.4% and WTI – by 5.5%.
Oil prices of benchmark grades fell on Thursday to their lowest level since early April and continue their weak decline on Friday morning.
This could be the first week of losing territory in the last five weeks. Among the negative factors is a strengthening U.S. dollar, notes MarketWatch. In addition, traders fear that further tightening of monetary policy by the Federal Reserve and other major central banks could worsen the global economy and reduce the demand for fuel.
The quotations of June futures for Brent at London Stock Exchange ICE Futures made $81.07 per barrel by 8:02 a.m. which is $0.03 (0.04%) lower than the closing price of the previous session. The previous day those contracts fell by $2.02 (2.4%) to $81.1 per barrel.
The price of WTI futures for June oil at NYMEX fell by $0.03, to $77.34 per barrel. At the end of previous session the contracts value decreased by $1.87 (by 2.4%) to $77.37 per barrel.
According to Trading Economics, the decrease in WTI quotations since the beginning of the current week exceeds 6%.
Oil prices rise moderately on Tuesday morning after a noticeable decline in the previous session.
The price of June futures for Brent on London’s ICE Futures Exchange stood at $84.91 per barrel by 8:13 a.m., $0.15 (0.18%) above the previous session’s closing price. Those contracts were down $1.55 (1.8%) to $84.76 a barrel at the close of trading on Monday.
The price of WTI futures for May at electronic trades of the New York Mercantile Exchange (NYMEX) is $80.96 per barrel by that time, which is $0.13 (0.16%) above the final value of the previous session. The day before contract fell by $1.69 (2.1%) to $80.83 per barrel.
As it became known on Monday, the index of New York Empire Manufacturing activity rose to plus 10.8 points in April from minus 24.6 points in the previous month. The indicator climbed into positive territory for the first time in five months and hit its highest level since July 2022. Analysts polled by Trading Economics had on average expected a rise to only minus 18 points.
The indicator pointed to the resilience of the U.S. economy, which increases the likelihood of new interest rate hikes by the Federal Reserve, MarketWatch noted.
On the other hand, some traders believe that U.S. GDP growth will continue to slow, which “limits the upside potential for oil prices and increases pressure” on the market, Zaye Capital Markets investment director Naeem Aslam said.
He said oil prices are more likely to decline than to rise, with prices likely to dip below $80 a barrel.
