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.
Oil prices are rising Tuesday morning, recovering from a sharp decline the day before.
The value of June futures for Brent on London’s ICE Futures Exchange stood at $84.73 a barrel by 8:05 a.m., $0.55 (0.65%) above the previous session’s closing price. Those contracts fell 94 cents to $84.18 per barrel at the close of trading on Tuesday.
The price of WTI futures for May at electronic trades of the New York Mercantile Exchange (NYMEX) is $80.33 per barrel by that time, which is $0.59 (0.74%) above the final value of the previous session. The day before, the contract fell by 96 cents to $79.74 per barrel.
The publication of reports by the U.S. Energy Information Administration, the International Energy Agency and OPEC will be key events for the oil market this week.
Investors are also waiting for data on U.S. inflation in March. Analysts polled by Trading Economics forecast that the pace of consumer price growth in the U.S. slowed to 5.2% in March from February’s 6%.
The spread between Brent futures for December of this year and December next rose to $5.5 a barrel from $2.5 a barrel three weeks earlier. This indicates that the market fears a reduction in inventories, notes Bloomberg.
Oil quotations changed little during the day on Thursday and ended the short week with an active rise.
June Brent futures on London’s ICE Futures Exchange rose $0.11 (0.13%) to $85.1 a barrel by 2:31 p.m.
By the same time quotations of WTI futures for May grew by $0.03 (0.04%) to $80.64 per barrel on the electronic auctions of the New York Mercantile Exchange (NYMEX).
Both grades gained about 6% since the beginning of the week due to the unexpected decision of some OPEC+ countries to voluntarily lower oil production from May to the end of this year. Analysts believe this will lead to a shortage of fuel on the world market later this year.
The oil market was also supported by the data that last week the oil reserves in the USA dropped by 3.74 mln barrels, gasoline reserves – by 4.12 mln barrels and distillates – by 3.63 mln barrels. Analysts on average had predicted a more moderate decline in reserves in all three categories.
“The bullish momentum in the oil market may have subsided, but the upside potential remains given declining supplies,” wrote PVM Oil Associates Ltd. brokerage analyst Stephen Brennock. Stephen Brennock. – The market will experience shortages this quarter, and they will only intensify in the second half of the year.”
Brent and WTI will be traded only electronically on Friday as the world’s leading exchanges will be closed due to the holiday (Good Friday).
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.
