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.
Oil prices are stable on Monday after a rise last week on fears of supply shortages in the market.
June Brent futures on London’s ICE Futures exchange stood at $86.28 a barrel by 8:10 a.m. Monday, down $0.03 (0.03%) from the previous session’s closing price. Those contracts rose $0.22 (0.3%) to $86.31 a barrel on Friday.
The price of WTI futures for May at electronic trades of NYMEX fell by $0.04, to $82.48 per barrel by that time. At the end of previous session the cost of contracts grew by $0.36 (0.4%) to $82.52 per barrel.
Last week Brent gained 1.4% and WTI gained 2.3%. Both grades rose in price for the fourth week in a row.
The market was supported by the forecast published on Friday by the International Energy Agency, according to which the global supply shortage in the third quarter will amount to 2 million barrels per day. “A serious oil deficit in the second half of the year was previously expected, but another reduction (of production by OPEC+ countries – IF-U) threatens to further squeeze supply and increase oil prices at a time when inflationary pressures are already hurting vulnerable consumers,” the agency said in a review.
In the second quarter, the deficit will be 400 thousand b / c, IEA predicts. Previously, the agency expected demand to exceed supply only in the third quarter. The average deficit in 2023 is estimated at 800,000 bpd.
OPEC, which published its monthly forecast a day before the IEA, still expects oil demand to increase by 2.3 million barrels per day (bpd) in 2023, to 101.89 million bpd – above pre-survey levels.
“Obviously, the recent decision by OPEC+ countries to cut production has given a boost to oil prices,” said ING Groep NV analyst Warren Patterson. – Nevertheless, we are seeing refiners’ profit margins shrink, indicating weak demand for petroleum products.”
S&P Global Inc. notes signals of lower diesel demand both in China and in the U.S. and Europe.
Oil prices are stable Wednesday ahead of the release of last week’s U.S. energy inventory data and the country’s March inflation report.
June Brent crude futures on London’s ICE Futures exchange stood at $85.65 a barrel by 8:05 a.m. Wednesday, up $0.04 (0.05%) from the previous session’s close. Those contracts rose $1.43 (1.7%) to $85.61 a barrel on Tuesday.
The price of WTI futures for May oil grew by $0.07 (0.09%) to $81.6 per barrel at electronic trades of the New York Mercantile Exchange (NYMEX) by that time. Contracts rose $1.79 (2.2%) to $81.53 a barrel in the previous session.
“The recent OPEC+ decision to cut production continues to support the oil market,” said Warren Patterson, who is responsible for oil market strategy at ING Groep NV.
“However, at the moment all traders’ attention is focused on data on consumer price dynamics in the U.S., and higher-than-expected inflation will have a negative impact on risky assets,” Patterson was quoted by Bloomberg.
These data will be published by the Labor Department of the USA on Wednesday at 15:00 Moscow time. Experts questioned by Trading Economics on average predict a slowdown of inflation in the country in March to 5.2% on an annualized basis from 6% in February.
The market’s attention is also directed to the U.S. Energy Department’s report on the country’s energy inventories for the week ended April 7, which will be released at 5:30 p.m.
According to the American Petroleum Institute (API), released on Tuesday night, U.S. oil inventories rose by 377,000 barrels last week after falling by 4.3 million barrels a week earlier. Experts polled by Trading Economics, on average, had expected a 1.3 mln barrel increase in inventories.
Stocks at Cushing terminal, which stores oil traded on Nymex, decreased by 1.4 million barrels, API data show. If this estimate is confirmed by official data, the reduction in inventories in Cushing will be noted at the end of the sixth week in a row.
