Benchmark crude oil prices are declining on Friday after a weak rise the day before.
However, over the course of this week, they have gained more than 3% amid forecasts of stable global demand for fuel, Trading Economics writes.
Quotes for August futures for Brent on the London ICE Futures exchange at 7:52 a.m. decreased by $0.39 (0.5%) to $82.36 per barrel. On Thursday, these contracts rose by $0.15 (0.2%) to $82.75 per barrel.
The price of July futures for WTI on the New York Mercantile Exchange (NYMEX) fell by $0.45 (0.6%) to $78.17 per barrel in the morning. As a result of the previous trading, the value of these contracts increased by $0.12 (0.2%) to $78.62 per barrel.
Earlier this week, the US Department of Energy raised its forecast for global oil demand in 2024 by 140 thousand bpd to 102.98 million bpd. Thus, the agency expects that this year’s demand growth will be almost 1.1 million bpd, while a month earlier it was expected to be 920 thousand bpd.
OPEC still expects global oil demand to increase by 2.25 million barrels per day in 2024, and by 1.85 million bpd next year, according to the cartel’s June report.
Standard Chartered experts believe that global oil demand will increase by 1.68 million barrels per day this year and by 1.41 million bpd next year.
Prices for benchmark crude oil are slightly declining on Friday morning after falling during the previous session.
The cost of July futures for Brent on the London ICE Futures exchange as of 8:14 a.m. is $81.75 per barrel, which is 11 cents lower than at the close of the previous trading. On Thursday, these contracts fell by $1.74 (2.1%) to $81.86 per barrel.
Futures for WTI for July in electronic trading on the New York Mercantile Exchange (NYMEX) fell by $0.23 (0.3%) to $77.68 per barrel by this time. The day before, futures fell by $1.32 (1.7%) to $77.91 per barrel.
Pressure on the quotes was exerted by a general decline in investor interest in risky assets, which also led to a decline in US stock indices and an increase in US government bond yields.
“The US economy remains resilient, and inflation remains a concern. Under such conditions, the Federal Reserve has the ability to keep rates high for a long time, which is bad for oil demand forecasts and puts pressure on prices,” said Ricardo Evangelista, senior analyst at ActivTrades.
Even the data that commercial oil stocks in the US fell by 4.16 million barrels last week, while experts expected a decline of 1.15 million barrels, failed to support the market.
Meanwhile, gasoline stocks increased by 2.02 million barrels and distillate stocks by 2.54 million barrels. Analysts had forecast a decrease in gasoline stocks by 1.5 million barrels and the same level of distillate stocks.
Oil prices are rising on Monday morning.
The cost of July futures for Brent on the London ICE Futures exchange as of 8:08 a.m. is $82.32 per barrel, which is $0.2 (0.24%) higher than at the close of the previous trading. On Friday, these contracts rose by $0.76 (0.9%) to $82.12 per barrel.
Futures for WTI for July in electronic trading on the New York Mercantile Exchange (NYMEX) have risen in price by this time by $0.28 (0.36%) to $78 per barrel. At the end of the previous session, the value of these contracts increased by $0.85 (1.1%) to $77.72 per barrel.
Last week, the international benchmark lost 2.2%, while the North American benchmark lost 2.3%.
The pressure on the quotes was exerted by fears that the US Federal Reserve will keep interest rates high for longer than expected, which would be a threat to demand in the event of a sharp economic slowdown.
This week, the latest value of the PCE index, the US central bank’s preferred inflation indicator, will be released. This data may affect its future policy.
In addition, on Sunday, the market is looking forward to the OPEC+ meeting, where leading oil producers are expected to extend production cuts until the end of the year.
Oil prices continue to rise on Tuesday morning as traders assess the situation in the Middle East.
The cost of July futures for Brent on the London ICE Futures exchange as of 8:04 a.m. is $83.48 per barrel, which is $0.15 (0.18%) higher than at the close of the previous trading. On Monday, these contracts rose by $0.37 (0.5%) to $83.33 per barrel.
June futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) have risen in price by this time by $0.14 (0.18%) to $78.62 per barrel. As a result of the previous trading, the value of these contracts increased for the first time in six sessions – by $0.37 (0.5%) to $78.48 per barrel.
Israel is not abandoning its plans to conduct an operation in Rafah, intending to put pressure on the Hamas movement in this way, The Times of Israel reports, citing a statement by the office of Israeli Prime Minister Benjamin Netanyahu.
“The Israeli military cabinet unanimously voted to continue preparations for an operation in Rafah in order to put military pressure on Hamas to make progress in releasing hostages and achieving the war’s goals,” the newspaper quoted the statement of the office as saying.
According to it, Hamas’s recent response to peace initiatives does not satisfy Israel. Netanyahu had earlier said that Hamas had put forward unacceptable demands, including a permanent ceasefire.
In addition, Saudi Aramco announced last weekend that it will raise oil prices for Asian buyers in June. The cost of the main grade supplied to Asia, Arab Light, will increase by $0.9 per barrel. As a result, it will cost $2.9 more than the basket of Omani and Dubai crude, Saudi Aramco said in a statement.
The price increase may indicate that Saudi Arabia is “not that worried about weak oil demand,” MartketWatch quotes Phil Flynn, senior market analyst at The Price Futures Group, as saying.
Oil prices are rising on Monday after the biggest drop since February in the previous week.
The cost of July futures for Brent on the London ICE Futures exchange as of 8:10 a.m. is $83.25 per barrel, which is $0.29 (0.35%) higher than at the close of the previous trading. On Friday, these contracts fell by $0.71 (0.9%) to $82.96 per barrel.
June futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) have risen in price by this time by $0.3 (0.38%) to $78.41 per barrel. As a result of the previous trading, the value of contracts decreased by $0.84 (1.1%) to $78.11 per barrel.
Over the week, Brent fell by 6%, while WTI fell by almost 7%.
Last week’s pressure on the market was exerted by data on the growth of US stocks and signals of declining demand, as well as some easing of fears associated with the possibility of a reduction in oil supplies from the Middle East.
Traders believe that amid a significant decline in prices, OPEC+ countries will continue to limit production. The majority of traders and analysts surveyed by Bloomberg expect that the alliance countries that adhere to the voluntary production curbs will continue the current measures until the end of this year.
Saudi Aramco announced last weekend that it will raise oil prices for Asian buyers in June. The cost of the main grade supplied to Asia, Arab Light, will increase by $0.9 per barrel. As a result, it will cost $2.9 more than a basket of Omani and Dubai crude, Saudi Aramco said in a statement.
Benchmark oil prices are moderately rising on Friday morning after rising in the last hours of trading the day before.
The price of June futures for Brent on the London ICE Futures exchange at 8:01 a.m. is $89.35 per barrel, which is $0.34 (0.38%) higher than at the close of the previous session. On Thursday, these contracts rose in price by $0.99 (1.1%) to $89.01 per barrel.
Quotations for June futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) by this time increased by $0.29 (0.35%) to $83.86 per barrel. At the end of the previous session, the contract rose by $0.76 (0.9%) to $83.57 per barrel.
For most of the last session, oil was trading in the red, managing to break even at the very end of trading. Such fluctuations were caused by low trading volume, Manish Raj, managing director of Velandera Energy Partners, told MarketWatch. “Too many investors have played the downside, and now they are trying to close their positions,” he said.
A day earlier, the U.S. Department of Energy reported that commercial oil reserves in the country fell by 6.368 million barrels last week. The drop was the largest since January, and the decline was recorded for the first time in five weeks. Despite this, oil prices declined slightly on Wednesday.
“The bulls are probably very upset by the market’s reaction to the larger-than-expected drop in oil inventories,” analysts at brokerage Zaner said.
