Oil prices are falling on Friday after rising to two-week highs in the previous session.
Brent crude futures on London’s ICE Futures exchange traded at 7:05 a.m. on Friday stood at $84.52 a barrel, down $0.23 (0.27%) from the previous session’s closing price. Those contracts rose $0.44 (0.5%) to $84.75 a barrel on Thursday.
The price of WTI April futures at electronic trades of NYMEX fell by $0.2 (0.26%) to $77.96 per barrel by that time. At the end of previous session the cost of contracts grew by $0.47 (0.6%) up to $78.16 per barrel.
Both Brent and WTI contracts finished the week with growth thanks to optimism caused by signals that activity is recovering in China, which outweighs concerns of traders related to the ongoing tightening of monetary policy in the USA.
The resilience of the U.S. economy and labor market in particular leaves the Federal Reserve (Fed) with room to maneuver for further rate hikes, and that supports the U.S. dollar, which in turn is a negative factor for commodity markets.
In addition to these two factors, traders are trying to assess the dynamics of Russian oil exports, which so far has remained more resilient than expected in the face of sanctions imposed on Russia, Bloomberg notes.
Oil continues to rise in price weakly on Thursday, after it rose in previous trading on fuel inventories data in the U.S.
The market is also supported by Russia’s plans to reduce oil production and exports, according to Trading Economics.
Brent crude futures on London’s ICE Futures Exchange rose $0.1 (0.12%) to $84.41 a barrel by 7:01 a.m. on May. On Wednesday those contracts grew by $0.86 (1%) to $84.31 per barrel.
WTI April futures price grew by $0.08 (0.10%) to $77.77 per barrel at electronic auctions of New York Mercantile Exchange (NYMEX) in the morning. According to results of previous trades the cost of contracts grew by $0.64 (0.8%) to $77.69.
Commercial oil inventories in the U.S. rose 1.17 million barrels last week to 480.21 million barrels, the Energy Department said Wednesday. Experts on average had expected an increase of 1.9 million barrels.
Stocks at the terminal in Cushing, which stores oil traded on the NYMEX, increased last week by 300,000 barrels.
Gasoline stocks declined by 874,000 barrels and distillates stocks increased by 179,000 barrels. Analysts forecasted a decrease in gasoline reserves by 1 million barrels and distillates by 500 thousand barrels.
Oil prices rose on Friday for the second consecutive session, despite data from the U.S. Department of Energy on a significant increase in oil inventories in the country.
April Brent crude futures on London’s ICE Futures exchange stood at $82.91 a barrel by 7:10 a.m. Friday, up $0.7 (0.85%) from the previous session’s close. Those contracts rose $1.61 (2%) to $82.21 a barrel on Thursday.
The price of WTI futures for April oil grew by $0.66 (0.88%) to $76.05 per barrel at electronic trades of the New York Mercantile Exchange (NYMEX) by that time. At the end of previous session the cost of contracts grew by $1.44 (2%) to $75.39 per barrel.
Commercial oil inventories in the United States rose 7.65 million barrels last week to 479.04 million barrels, the highest since May 2021, the nation’s Energy Department’s weekly report showed.
Stocks at the Cushing terminal, where NYMEX traded crude oil is stored, rose for the eighth straight week to their highest since June 2021.
Distillate stocks increased by 2.7 million barrels, while gasoline reserves unexpectedly declined by 1.86 million barrels.
The oil market has remained in a narrow price range – about $11 per barrel – since the beginning of 2023. On the one hand, it is supported by expectations of increased demand in China after the lifting of quarantine restrictions and fears of supply reduction in the market due to the reduction of Russian production. On the other hand, the market fears weakening of the American economy amid tightening of the monetary policy by the Federal Reserve System (FRS), notes Bloomberg.
“A stronger increase in business activity in China is needed for a solid rebound in oil prices,” notes Saxo Capital Markets analyst Charo Chanana.
The price of Brent crude oil was falling on Tuesday after a rise the day before, while WTI, which was not traded on Monday, was stable.
The oil market has remained in a narrow price range of around $11/bbl since early 2023. On the one hand, it is supported by expectations of increased demand in China after the lifting of quarantine restrictions and fears of supply reduction on the market due to the reduction of production by Russia. On the other hand – the market fears the weakening of the U.S. economy amid tighter monetary policy by the Federal Reserve (Fed), said Bloomberg.
The price of April Brent crude futures on London’s CE Futures exchange is $83.08 a barrel by 7:10 a.m. Tuesday, down $0.99 (1.18%) from the previous session’s closing price. Those contracts rose $1.07 (1.3%) to $84.07 a barrel on Monday.
The price of WTI futures for April oil grew by $0.03 (0.04%) to $76.58 per barrel at electronic trades of New York Mercantile Exchange (NYMEX) by that time. There were no major trades on the NYMEX on Monday due to a holiday in the U.S. (Presidents’ Day).
March contracts, which expire at the close of Tuesday’s session, are stable at $76.34 a barrel.
The big event this week is the release of the minutes of the latest Fed meeting, in which the benchmark interest rate was raised by 25 basis points.
“Any hawkish signals in the Fed meeting minutes will be a catalyst for lower oil prices,” notes IG Asia Pte Ltd. analyst Yep June Rong. The market, according to him, is trying to go up amid improving prospects for supply due to the economic recovery in China.
In addition, experts see signals of increased demand in India: refinery workload in the country in January rose to its maximum level for five years, notes Bloomberg.
Oil prices are rising Monday morning, recovering from last week’s sharp decline.
The price of April futures on London’s ICE Futures Exchange stood at $83.38 a barrel by 7:05 a.m., $0.38 (0.46%) above the previous session’s closing price. Those contracts fell by $2.14 (2.5%) to $83 a barrel at the close of trading last Friday.
The price of WTI futures for March at the electronic exchange of New York Mercantile Exchange (NYMEX) by that time is $76.68 per barrel, which is $0.34 (0.45%) above the final value of the previous session. At that time the contract went down in price by $2.15 (2.7%) to $76.34 per barrel.
Brent was down by 3.9% and WTI by 4.2% at the end of last week. The main negative factor for world markets, including oil market, was tough rhetoric of representatives of major central banks of the world, which increased the likelihood of new rate hikes, writes MarketWatch.
“Oil has been caught between a hammer and anvil, or in other words, between the Fed and a hard landing,” said SPI Asset Management managing partner Stephen Innes.
Meanwhile, the number of active oil rigs in the U.S. fell by two last week to 607, oil services company Baker Hughes reported. The number of gas rigs increased by one unit to 151.
Trading volume on Monday is likely to be lower than usual as U.S. exchanges are closed in observance of Presidents’ Day.
Oil prices are falling on Friday as signals of crude glut in the U.S. outweigh expectations of demand growth in China, Bloomberg writes.
The cost of April futures for Brent crude oil on London’s ICE Futures exchange is $84.27 a barrel by 7:15 a.m. on Friday, down $0.87 (1.02%) from the previous session’s closing price. Those contracts fell $0.24 (0.3%) to $85.14 a barrel on Thursday.
March futures on WTI crude oil at electronic trades of NYMEX fell by that time by $0.85, to $77.64 per barrel. The previous session’s contract value was down $0.1 (0.1%) to $78.49 a barrel.
“Investors are trying to assess which of the major oil market drivers will prove the most influential in the next few months,” said CIBC Private Wealth senior trader Rebecca Babin.
Major Chinese air carriers announced a significant increase in flight loadings, indicating an upturn in tourist activity, Bloomberg notes.
Meanwhile, oil refining companies in China are increasing their purchases of raw materials. According to the agency’s sources, the trading “subsidiary” Sinopec bought 10 million barrels of oil in the UAE with delivery in April. A number of other Chinese refiners, including China National Chemical Corp. and Rongsheng Petrochemical Co. are also increasing their oil purchases, including from the United States.
At the same time, the U.S. Energy Department said Wednesday that the country’s oil inventories jumped 16.28 million barrels last week. Experts predicted an average increase of 2 million barrels.
U.S. Energy Department data this year “consistently give bearish signals to the market, pointing to weak consumer demand, low refinery activity and rising oil inventories,” analysts say Sevens Report Research.
