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.
Oil prices are rising Thursday morning, recovering from a moderate decline the day before, triggered by data on a sharp increase in U.S. oil inventories last week.
The price of April futures on London’s ICE Futures Exchange stood at $85.85 per barrel by 7:05 a.m., $0.47 (0.55%) above the previous session’s closing price. Those contracts fell by $0.2 (0.2%) to $85.38 per barrel at the close of trading on Wednesday.
The price of WTI futures for March at electronic trades of the New York Mercantile Exchange (NYMEX) is $79.16 per barrel by that time, which is $0.57 (0.73%) above the final value of the previous session. The previous day the contract fell by $0.47 (0.6%) to $78.59 per barrel.
According to the report of U.S. Department of Energy published on Wednesday, oil reserves in the country last week jumped by 16.28 million barrels. Gasoline inventories declined by 2.32 million barrels and distillates by 1.28 million barrels.
Experts expected an increase of oil reserves by 2 million barrels, gasoline reserves by 1.5 million barrels and distillates by 1 million barrels.
At the same time, the Energy Department explained that the data on oil reserves includes an upward adjustment of 1.967 million barrels per day, or about 14 million barrels for the whole week.
Matt Smith, a senior analyst at Kpler, told MarketWatch that the adjustment “was the result of previous underestimation of imports and/or production and overestimation of exports and/or refinery capacity.”
Meanwhile, the International Energy Agency (IEA) raised its forecast for oil demand growth in 2023 by 94,000 bpd, according to its monthly report.
Thus, analysts have increased the estimate of demand in 2022 compared to the previous report by 107 thousand b / s – up to 99.96 million b / s, and the forecast for 2023 increased by 202 thousand b / s – to a record 101.92 million b / s. Thus, the IEA expects global oil demand to increase by 1.96 mln bpd this year compared to 1.87 mln bpd a month earlier.
Oil prices are falling on Tuesday on a report by Bloomberg that the U.S. plans to sell additional amounts of crude oil from its Strategic Petroleum Reserve (SPR).
According to the agency, the USA intends to sell 26 million barrels of oil from SPR in the period from April to June this year.
April Brent crude futures on London’s ICE Futures exchange stood at $86.01 a barrel by 7:10 a.m. Tuesday, down $0.6 (0.69%) from the previous session’s closing price. Those contracts rose $0.22 (0.3%) to $86.61 a barrel on Monday.
The price of WTI futures for March crude oil at electronic trades of NYMEX fell by $0.87, to $79.27 per barrel by that time. At the end of previous session the contracts value grew by $0.42 (0.5%) up to $80.14 per barrel.
The previous day the oil market grew due to signals of an increase in business activity in China, while Russia announced a cut in its production. Russian Deputy Prime Minister Alexander Novak told reporters on Friday that the country intended to reduce oil production by 500,000 bpd in March.
Traders’ attention on Tuesday will be focused on U.S. inflation data for January, which will allow investors to make new forecasts about future Federal Reserve policy and the prospects of the American economy, Market Watch notes.
