Oil prices are rising in the morning trading on Tuesday on information about further weakening of anti-coke measures in China and closure of some refineries in the US due to bad weather.
The price of February futures for Brent crude oil on London’s ICE Futures Exchange stood at $84.4 a barrel by 7:20 a.m. Tuesday, up $0.48 (0.57%) from the close of the previous session. Those contracts rose $2.94 (3.6%) to $83.92 a barrel in trading the previous Friday. There were no oil trades on Monday because of the Catholic Christmas.
The price of WTI crude futures for February increased by $0.5 (0.63%) to $80.06 per barrel in electronic trading on the New York Mercantile Exchange (NYMEX) by that time. By closing of previous trades the cost of these contracts grew by $2.07 (2.6%) to $79.56 per barrel.
Chinese authorities will cancel obligatory quarantine for people arriving in the country from abroad since January 8, Bloomberg informs. In addition, Beijing has downgraded its COVID-19 surveillance, abandoning the legal basis for imposing harsh measures to combat the spread of infection. “Our priorities should shift from preventing and controlling (the coronavirus – IF) to treating it,” said Liang Wannian, head of the COVID-19 expert group under China’s National Health Commission, in an interview for People’s Daily.
Market participants are also following the news from the USA where the production of petroleum products is falling due to the difficult weather conditions in the key regions which were covered by a snowstorm. Thus, production was stopped at two major refineries Motiva Port Arthur and Marathon Galveston Bay in Texas. According to Bloomberg, their capacity is more than 1.8 million barrels per day.
Oil is rising in price on Thursday morning after a significant increase in the previous session, caused by a reduction in fuel stocks in the U.S.
The value of February futures on London’s ICE Futures Exchange is $82.54 per barrel by 8:55 Moscow time, which is $0.34 (0.41%) above the level at the end of the previous session. At the close of trading on Wednesday these contracts rose by $2.21 (2.8%) to $82.2 a barrel.
The price of WTI futures for February at electronic trades of the New York Mercantile Exchange (NYMEX) is $78.67 per barrel by that time, which is $0.38 (0.49%) above the final value of the previous session. The contract rose by $2.06 (2.7%) to $78.29 per barrel at the end of last session.
Last week stocks of oil in the U.S. fell by 5.9 million barrels, said the Energy Department the day before. Experts interviewed by Bloomberg agency on average expected an increase of 2.5 million barrels.
At the same time, commercial reserves of gasoline increased by 2.53 million barrels and distillates decreased by 242,000 barrels.
“Vigorous exports and falling imports due to the Keystone pipeline shutdown led to a significant drop in crude inventories,” wrote Kplr lead oil analyst Matt Smith. – Refinery utilization has fallen to its lowest in seven weeks, which has somewhat limited the reduction in reserves, as has the release of 3.7 million barrels from strategic reserves.”
Additionally, market participants are keeping an eye on the coronavirus situation in the PRC.
“Despite skyrocketing illness rates and reports of overcrowded hospitals, Chinese authorities are not quarantining cities, which means energy demand is rising as the world’s second-largest economy gets back on track,” Sevens Report Research quoted MarketWatch analysts as saying.
Oil prices are virtually unchanged on Wednesday morning after rising the day before.
The price of February futures for Brent on London’s ICE Futures Exchange at 8:05 a.m. Moscow time is $79.94 per barrel, which is $0.05 (0.06%) lower than at the close of the previous session. Those contracts rose by 19 cents (0.2%) to $79.99 a barrel at the close of trading on Tuesday.
The price of WTI futures for February at electronic trades on the New York Mercantile Exchange (NYMEX) is $76.17 per barrel by that time, which is $0.06 (0.08%) below the final value of the previous session. The contract rose by $0.85 (1.1%) to $76.23 per barrel at the end of last session.
The previous day oil quotations were supported by decline of the US dollar rate, which increased the attractiveness of oil as an object for investments of holders of other currencies.
In addition, investors are following the situation with the coronavirus in China. The removal of quarantine restrictions and government stimulus measures are believed to be positive factors for fuel demand in the long term. At the same time, rising COVID-19 infections are dampening the market’s optimism, MarketWatch notes.
“After a long period of liquidating long positions, the market has become more balanced, and a bullish mood is gradually returning to oil traders,” SPI Asset Management managing director Stephen Innes wrote. – Despite all concerns about the recession in the economy, there are still those who want to buy oil after a decrease in its quotations. This demonstrates that oil is one of the most needed commodities in the world.
At the same time, reduced liquidity in the market, which is traditionally observed at the end of the year, puts pressure on quotations, the expert added.
Oil prices are declining in trading on Friday, continuing to fall after a drop in the previous session.
The cost of February futures for Brent at London’s ICE Futures Exchange was $80.91 per barrel by 7:14 a.m. (approx. 0.37%), down $0.30 (approx. 0.37%) from the close of previous session. Those contracts fell by $1.49 (1.8%) to $81.21 per barrel at the close of trading on Thursday.
The price of WTI futures for January at electronic trades of the New York Mercantile Exchange (NYMEX) is $75.75 per barrel by that time, which is $0.36 (0.47%) lower than the final value of the previous session. The contract fell by $1.17 (1.5%) to $76.11 per barrel at the end of last session.
However, both grades may gain more than 7% during the week.
The market was buoyed this week by the International Energy Agency raising its 2022 oil demand growth estimate by 140,000 barrels per day (bpd) to 2.3 million bpd. The 2023 demand growth forecast was also raised by 100k bpd to 1.7 million bpd.
On the other hand, tighter monetary policy of the world’s major central banks has put pressure on oil quotations. On Thursday, the European Central Bank (ECB) and the Bank of England decided to raise key rates – by 50 basis points. The day before, the Federal Reserve (Fed) also raised rates by 50 bps to 4.25-4.5% per annum.
Investors are concerned that tight monetary policy may cause an economic slowdown and, consequently, a decline in demand for oil.
Oil prices are falling slightly on Wednesday after a strong rise in the previous session.
The market rise on Tuesday was promoted by the forecasts of a cold snap in the USA and also by the weakening of the dollar after the publication of the statistical data, which showed a slowdown in inflation in the states in November.
In addition, the market continues to be supported by the situation with the Keystone pipeline, which was closed last week, and expectations of increased demand in China as a result of the easing of quarantine restrictions, Market Watch said.
The cost of February futures for Brent crude oil on London’s ICE Futures Exchange was $80.51 a barrel by 7:10 a.m. KSC on Wednesday, down $0.17 (0.21%) from the previous session’s closing price. Those contracts rose $2.69 (3.5%) to $80.68 a barrel at the close of trading on Monday.
The price of WTI futures for January oil fell by $0.11 (0.15%) to $75.28 per barrel at electronic trades of New York Mercantile Exchange (NYMEX) by that time. By the close of previous trading the cost of these contracts increased by $2.22 (3%) to $75.39 a barrel.
Canada’s TC Energy, the operator of Keystone, plans to partially open the pipeline Wednesday and fully return it to service Dec. 20, Bloomberg reported, citing sources.
The focus for traders Wednesday is last week’s U.S. energy inventory data, to be released by the Energy Department at 5:30 p.m. CSC.
American Petroleum Institute (API) data released the day before showed a 7.819 million barrel increase in U.S. oil inventories for the week ended Dec. 9.
Oil prices rose for the second consecutive session on expectations of increased demand in China as a result of easing quarantine restrictions while supply in the market decreased due to the closure of the Keystone oil pipeline.
Canada’s TC Energy, which suspended operation of the pipeline last week, is troubleshooting the issues and has not yet presented a plan to bring Keystone back online.
The shutdown of the pipeline, which connects oil fields in southern Canada and refineries in the U.S. Gulf Coast, reduced global supply by 600,000 barrels per day (bpd), while “the supply-demand balance there was already weak,” said Manish Raj, chief financial officer of Velandera Energy Partners, cited by Market Watch.
The price of February futures for Brent crude oil on London’s ICE Futures exchange is $79.12 a barrel by 7:10 a.m. CST on Tuesday, up $1.13 (1.45%) from the previous session’s close. Those contracts rose $1.89 (2.5%) to $77.99 a barrel at the close of trading on Monday.
The price of WTI futures for January oil grew by $1.01 (1.38%) to $74.18 per barrel at electronic trades of New York Mercantile Exchange (NYMEX). By the close of preious trading the cost of those contracts rose by $2.15 (3%) to $73.17 a barrel.
Both types of oil finished last week at their lowest level since December 2021, losing more than 11% over the week.
China’s ambassador to the United States, Qin Gang, said Monday that Beijing would continue to ease quarantine restrictions and expect to see an increase in foreign tourist arrivals in the near future. But the incidence of COVID-19 in the country continues to rise, and experts at the consulting firm FGE warned of the possibility of an unexpected tightening of restrictions by Beijing.
“Investor optimism about China’s easing of covey measures and likely increase in oil demand outweighs fears of a downturn in other parts of the world,” said Vishnu Varathan, an analyst at Mizuho Bank Ltd. in Singapore, quoted by Bloomberg.
