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.
Oil prices are down on Monday after rising more than 2% on Friday on information about Russia’s intention to reduce production.
April Brent crude futures on London’s ICE Futures exchange stood at $85.58 a barrel by 7:10 a.m. Monday, down $0.81 (0.94%) from the previous session’s closing price. Those contracts rose $1.89 (2.2%) to $86.39 a barrel on Friday.
The price of WTI futures for March crude oil fell by $0.92 (1.15%) to $78.8 per barrel at electronic auctions of New York Mercantile Exchange (NYMEX) by that time. The contract value grew by $1.66 (2.1%) to $79.72 per barrel at the end of previous session.
Over the previous week Brent gained 8.1% and WTI gained 8.6%.
Russian Deputy Prime Minister Alexander Novak told reporters on Friday that the country intended to cut oil production by 500,000 bpd in March.
Most analysts have already put the likelihood of Russia cutting oil production by 700,000 to 900,000 barrels in 2023 on prices, said CIBC Private Wealth US senior trader Rebecca Babin.
“The key factor that could lead to prices moving out of the current range is the dynamics of Chinese demand,” she says.
Oil prices are down on Friday, but finished the week in the plus.
The price of April futures on London’s ICE Futures Exchange for Brent was $84.32 a barrel by 7:15 a.m. on Friday, down $0.18 (0.21%) from the previous session’s close. Those contracts fell $0.59 (0.7%) to $84.5 a barrel at the close of trading on Thursday.
The price of WTI futures for March crude oil at NYMEX fell by $0.29 (0.37%) to $77.77 per barrel by that time. By the close of previous trading the cost of those contracts declined by $0.41 (0.5%) to $78.06 a barrel.
Both Brent and WTI gained more than 5% YoY on optimism about prospects for Chinese demand, which rose after Saudi Arabia raised March prices for its main oil grade supplied to Asia.
At the same time, traders fear that the protracted tightening of monetary policy in the U.S. could weaken the country’s economy and, consequently, fuel consumption.
Earlier this week, several U.S. Central Bank executives made it clear that they believe it is necessary to continue raising the U.S. benchmark interest rate because the fight against high inflation is not over.
“Oil will continue to rise in price if fears of a downturn in the economy subside,” said CITIC Futures Co. Gui Chenxi, cited by Bloomberg. – The market is hoping for higher energy demand as we see mobility growth in China, as well as in the U.S. and Europe.
Benchmark crude oil is moderately expensive Wednesday morning after rising to weekly peaks the day before, driven by hopes for a recovery in demand in China and fears of supply disruptions due to an earthquake in Turkey.
The price of April futures for Brent on London’s ICE Futures Exchange stood at $83.78 a barrel by 7:20 a.m., $0.09 (0.11%) higher than at the close of the previous session. Those contracts rose by $2.7 (3.3%) to $83.69 a barrel at the close of trading on Tuesday.
The price of WTI futures for March at electronic trades of the New York Mercantile Exchange (NYMEX) is $77.35 per barrel by that time, which is $0.21 (0.27%) above the final value of the previous session. The contract rose by $3.03 (4.1%) to $77.14 a barrel, the highest since January 31.
As earlier reported, the work of Turkish Ceyhan oil terminal was suspended after the earthquake that killed over 7,000 people in Turkey and Syria.
In addition, the market continues to assess the words of the head of the International Energy Agency (IEA) Fatih Birol that China’s economic recovery may proceed at a faster pace than expected, which in turn will lead to a global increase in demand for oil and LNG.
Meanwhile, American Petroleum Institute (API) data released on Tuesday night showed a 2.18 million barrel decline in U.S. inventories for the week ended February 3.
The official report on U.S. energy reserves will be released Wednesday at 5:30 p.m. Analysts polled by Trading Economics expect an average increase of about 2.5 million barrels of oil reserves.
