Oil prices are declining in trading on Tuesday after a strong rise in the previous session.
The cost of March futures on London’s ICE Futures Exchange for Brent is $79.16 a barrel by 7:08 a.m. (EET) on Tuesday, down $0.49 (0.62%) from the close of the previous session. At the close of trading on Monday those contracts grew by $1.08 (1.37%) to $79.65 a barrel.
The price of WTI futures for February crude oil at electronic trades of NYMEX fell by that time by $0.40 (0.54%) to $74.23 per barrel. By closing of previous trades the cost of these contracts grew by $0.86 (1.17%) to $74.63 per barrel.
Brent has fallen by 8.5% and WTI by 8.1% at the end of the previous week.
Pressure on the oil market was put by “hawkish” statements by representatives of the U.S. Federal Reserve (Fed), Trading Economics wrote. Mary Daley, head of the Federal Reserve Bank (FRB) of San Francisco, said she thinks the U.S. central bank will have to raise the rate above 5% to fight inflation.
“I think a level above 5 percent is absolutely likely,” she told The Wall Street Journal.
Her counterpart at the Atlanta Fed, Rafael Bostic, also reiterated an earlier view that the rate would be raised to more than 5 percent. Currently, its range is 4.25-4.5%.
Investors are also cautious ahead of the Lunar New Year, fearing that increased travel by Chinese citizens could lead to an increase in the incidence of coronavirus worldwide, Trading Economics noted.
Oil prices rise on Monday after a significant decline in the past week.
The price of March futures for Brent oil on the London ICE Futures exchange by 7:10 qoq on Monday is $79.45 per barrel, which is $0.88 (1.12%) higher than the closing price of the previous session. As a result of trading on Friday, these contracts fell by $0.12 (0.2%) to $78.57 per barrel.
The price of futures for WTI oil for February in electronic trading on the New York Mercantile Exchange (NYMEX) increased by this time by $0.89 (1.21%), to $74.66 per barrel. By the close of previous trading, the cost of these contracts increased by $0.1 (0.1%) to $73.77 per barrel.
As a result of the past week, Brent fell by 8.5%, WTI – by 8.1%.
Traders are evaluating the prospects for oil demand in China, where the incidence of COVID-19 has increased since the lifting of quarantine restrictions. In addition, fears of a downturn in the global economy remain in the context of the ongoing tightening of monetary policy by the world’s largest central banks.
Pressure on the oil market last week was exerted by the strengthening of the US dollar, lower natural gas prices, as well as the risks of a recession in the world, said Troy Vincent, chief analyst at DTN.
“Warm weather and falling gas prices dampen expectations that consumers will switch from gas to oil this winter,” Market Watch quoted Vincent as saying. “The increase in economic activity in China following the lifting of anti-COVID restrictions is the main factor that could push oil demand to growth. However, there remains serious uncertainty about the timing of the return of the PRC economy to normal activity.”
Oil prices are declining amid fears of a downturn in the global economy and lower energy demand, Trading Economics reported.
This year will be tougher for the global economy than last year, International Monetary Fund (IMF) Managing Director Kristalina Georgieva said. “We expect a third of the world economy to be in recession,” she said in an interview with CBS.
March Brent crude futures on London’s ICE Futures exchange were priced at $85.51 a barrel at 7:00 ksk, down $0.4 (0.47%) from the previous session’s closing price.
The price of futures on WTI crude oil for February on electronic trade of the New York Mercantile Exchange (NYMEX) decreased by that time by $0.35 (0.44%) – to $79.91 per barrel.
By the end of 2022 Brent quotations went up by about 10%, WTI – by 7%.
The company’s oil price is expected to remain stable on the last working day of the year amid low trading activity, ending the fourth quarter in negative territory, Interfax-Ukraine news agency Interfax reported on Thursday (Dec 2).
Fears that a sharp lifting of quarantine restrictions in China, which has already led to an increase in the incidence of COVID-19, will weaken the country’s economy and, consequently, the demand for oil, put pressure on the market. In addition, investors do not rule out a new wave of coronavirus infection in the world.
Earlier, the Chinese authorities announced that they would resume issuing documents for tourists wishing to travel abroad. The United States and Italy have already announced additional requirements for passengers arriving from China.
Data from the U.S. Department of Energy, released on Thursday, showed an unexpected increase in the country’s oil reserves last week. Reserves rose by 718,000 barrels, while analysts polled by Bloomberg agency forecast an average decline of 1.2 million barrels.
Gasoline inventories decreased by 3.1 million barrels and distillates increased by 283,000 barrels.
The value of March futures on Brent crude oil on London’s ICE Futures Exchange by 7:15 am on Friday stands at $83.8 per barrel, which is $0.34 (0.41%) higher than the price at the close of the previous session. Those contracts fell $0.53 (0.6%) to $83.46 a barrel at the close of trading on Thursday.
The price of WTI futures for February increased by $0.33 (0.42%) up to $78.73 per barrel at electronic trades of NYMEX. By the close of previous trading, those contracts had fallen $0.56 (0.7%) to $78.4 a barrel.
“We have another year ahead of us with serious uncertainty, and the oil market will remain highly volatile,” said Oanda chief analyst Craig Erlam, cited by Bloomberg. – The new year promises many surprises and twists and turns.
Oil prices continue to decline on Thursday with weak trading activity in the last days of the year.
Investors’ optimism connected with expectations of increase of demand for oil after lifting of quarantine restrictions in China was replaced with concerns of new wave of COVID-19 disease in the world.
Earlier Beijing announced its intention to soften the epidemiological requirements for those arriving in the country from January 8. In addition, the Chinese authorities will resume issuing documents for tourists wishing to travel abroad. The U.S. and Italy have already announced additional requirements for passengers arriving from China.
The cost of February futures on Brent oil at London’s ICE Futures Exchange was $83.14 per barrel by 7:15 a.m. KSC on Thursday, down $0.12 (0.14%) from the close of the previous session. Those contracts fell $1.07 (1.3%) to $83.26 a barrel at the close of trading on Wednesday.
The price of WTI futures for February at electronic trades of NYMEX fell by $0.28 (0.35%) by that time to $78.68 per barrel. By the close of previous trading, those contracts had fallen $0.57 (0.7%) to $78.96 a barrel.
“China’s rejection of travel restrictions could trigger a new global wave of COVID-19,” said John Driscoll, director of JTD Energy Services Pte. in Singapore, cited by Bloomberg. – This, in turn, may weaken the demand for oil and lead to lower prices.
On Thursday, traders will focus on the U.S. energy inventory data for the previous week to be published by the country’s Department of Energy at 19:00 MSK.
The American Petroleum Institute (API) report showed that U.S. oil inventories fell by 1.3 million barrels in the week ended December 23, after falling by 3.07 million barrels a week earlier.
Oil prices are changing weakly on Wednesday morning amid low trading volumes during the short pre-New Year’s week.
Investors are assessing the supply and demand situation in the global fuel market and are closely following news from China and the United States.
The value of February futures for Brent at London’s ICE Futures Exchange didn’t change since yesterday’s close of trading and was $84.33 per barrel by 7:15 pm (KSC). At the end of Tuesday’s trading these contracts rose by $0.41 (0.5%).
The price of WTI futures for February at electronic trades of the New York Mercantile Exchange (NYMEX) is $79.58 per barrel by that time, which is $0.05 (0.06%) above the final value of the previous session. The contract fell by 3 cents (0.1%) to $79.53 per barrel at the end of last session.
The oil was traded in plus for the most part of the session the day before on the news that Chinese authorities would cancel obligatory quarantine for those coming to the country since January 8. Analysts believe that the removal of the last restrictions will accelerate the growth of the world’s second-largest economy and increase the demand for fuel.
The market was also supported by reports that the production of petroleum products at major U.S. refineries was suspended due to a snowstorm. As early as Tuesday, however, operations began resuming.
“Throughout 2022, lockdowns in China led to sharp short-term drops in demand, and now many are raising their expectations for 2023,” said Robbie Fraser of Schneider Electric. – But recession risks and rising interest rates remain major negatives for oil futures, limiting any attempt to move higher.
