Oil prices are declining on Monday morning after a strong growth following last week’s results, driven by hopes for a softening of the approach of the Chinese authorities to combat the coronavirus.
The price of January futures for Brent at London’s ICE Futures Exchange stood at $97.59 per barrel by 7:06 a.m., down $0.98 (0.99%) from the close of the previous session. At the close of trading last Friday those contracts grew by $3.9 (4.1%) to $98.57 per barrel.
The price of WTI futures for December at the electronic trading on the New York Mercantile Exchange (NYMEX) is $91.44 per barrel by that time, down $1.17 (1.26%) from the previous session. The contract rose by $4.44 (5%) to $92.61 per barrel at the end of last session.
Brent gained 5.1% last week to finish at its highest level since late August, while WTI gained 5.4%.
The Wall Street Journal wrote last Friday, citing several sources, that Zeng Guang, a former top epidemiologist at China’s Center for Disease Control and Prevention (CDCP), said during a conference that a significant change in the country’s authorities’ approach to the coronavirus pandemic was expected in 2023.
Over the weekend, however, Beijing reiterated its intention to adhere “rigorously” to a “zero tolerance” policy for COVID-19.
“Traders believe China will be a driver of fuel demand growth at some point next year on the back of the country’s accelerating economic growth,” said SPI Asset Management managing partner Stephen Innes.
Oil prices are rising during trading on Tuesday after falling in the previous session.
The cost of January futures for Brent oil on the London ICE Futures exchange by 8:06 am TSK on Tuesday is $93.57 per barrel, which is $0.76 (0.82%) higher than the closing price of the previous session. As a result of trading on Monday, these contracts fell by $0.96 (1%) to $92.81 per barrel.
The price of futures for WTI oil for December in electronic trading on the New York Mercantile Exchange (NYMEX) rose by this time by $0.59 (0.68%), to $87.12 per barrel. By the close of previous trading, the value of these contracts fell by $1.37 (1.6%) to $86.53 per barrel.
Traders are also waiting for meetings of large central banks, writes Bloomberg.
The US Federal Reserve System (FRS) will sum up the results of a two-day meeting on Wednesday against the backdrop of persistently high inflation in the States. On Thursday, the decision on the key rate will be made by the Bank of England.
Support for oil comes from the weakening dollar, which makes commodity prices more attractive to investors.
Meanwhile, the OPEC annual review says that the annual growth in oil demand in the world until 2025 will average 2.1 million b / d, in the next 10 years it will slow down and stabilize by 2035.
According to the report, in 2022, global oil consumption will rise to 100.3 million b/d after 96.9 million b/d in 2021. Further, demand will increase significantly from year to year until 2025: by an average of 2.1 million bpd.
The total oil production quota of the OPEC+ countries has been reduced by 2 million barrels per day since November compared to August levels (coincides with October quotas – IF).
The decision was made by the alliance at a meeting held on October 5, which was held in person for the first time in more than two years.
Oil prices tumble on Monday on signs of a continued slowdown in economic activity in China due to tight quarantine measures to curb the spread of COVID-19.
The Purchasing Managers’ Index (PMI) for China’s manufacturing industry fell to its lowest level since July of 49.2 in October from 50.1 a month earlier, according to data from China’s National Bureau of Statistics (GSO).
An index value below 50 points indicates a decline in activity in the sector.
PMI services in China in October fell to 48.7 points, dropping below 50 points for the first time since May.
The cost of December futures for Brent oil on the London ICE Futures exchange by 8:15 am TST on Monday is $95.03 per barrel, which is $0.74 (0.77%) lower than the closing price of the previous session. As a result of trading on Friday, these contracts fell by $1.19 (1.2%) to $95.77 per barrel.
December futures expire at the close of the market on Monday. More actively traded January contracts fell by $0.69 (0.74%) to $93.08 per barrel.
The price of futures for WTI oil for December in electronic trading on the New York Mercantile Exchange (NYMEX) has decreased by $0.49 (0.56%) by this time, to $87.41 per barrel. By the close of previous trading, the value of these contracts fell by $1.18 (1.3%) to $87.9 per barrel.
As a result of last week, Brent rose by 2.4% per barrel, WTI – by 3.4%. The market closes the month with a rise of almost 10% due to the decision taken by OPEC + to cut production from November by 2 million barrels per day.
“Oil prices are likely to rise as OPEC+ cuts production and the EU embargo on Russian oil purchases (introduced in response to the continuation of the full-scale war unleashed by the Russian Federation against Ukraine – IF) will come into force on December 5,” notes the managing director Vanir Global Markets in Singapore James Whistler quoted by Bloomberg.
Oil prices are falling during trading on Friday after a steady rise the day before.
December futures for Brent on London’s ICE Futures exchange fell by $0.77 (0.79%) by 8:00 a.m. to $96.19 per barrel. As a result of trading on Thursday, they rose by $1.27 (1.33%) to $96.96 per barrel.
Quotes of WTI futures for December in electronic trading on the New York Mercantile Exchange (NYMEX) by the specified time decreased by $0.94 (1.06%) to $88.14 per barrel. According to the results of previous trading, they increased by $1.17 (1.33%) to $89.08 per barrel.
Despite Friday’s decline, oil prices may end the week with growth on the back of a sharp fall in the dollar, as well as data on US exports.
Meanwhile, investors remain cautious amid an uncertain demand outlook due to rising inflation, higher interest rates and growing recession risks, writes Trading Economics.
Earlier this week, it became known that US commercial oil inventories increased by 2.59 million barrels last week, while experts polled by Bloomberg expected a more moderate increase – by 1.5 million barrels.
The US Department of Energy report also reported that gasoline inventories fell by 1.48 million barrels, while distillate reserves increased by 170 thousand barrels. Analysts predicted a decline in gasoline by 1.5 million barrels, distillates – by 1 million barrels.
Oil prices rise moderately on Thursday morning after rising to two-week highs the day before, provoked by the depreciation of the dollar and data on the reduction of gasoline inventories in the United States.
The price of December futures for Brent on London’s ICE Futures is $95.93 per barrel by 8:02 a.m., which is $0.24 (0.25%) higher than the closing price of the previous session. As a result of trading on Wednesday, these contracts rose by $2.17 (2.3%) to $95.69 per barrel.
The price of futures for WTI oil for December in electronic trading on the New York Mercantile Exchange (NYMEX) is $88.1 per barrel by this time, which is $0.19 (0.22%) higher than the final value of the previous session. A day earlier, the contract rose in price by $2.59 (3%) to $87.91 per barrel.
As it became known on Wednesday from the report of the US Department of Energy, commercial oil reserves in the country increased by 2.59 million barrels last week, while experts polled by Bloomberg expected a more moderate increase – by 1.5 million barrels.
Inventories of gasoline decreased by 1.48 million barrels, while distillate reserves increased by 170 thousand barrels. Analysts predicted a decrease in gasoline stocks by 1.5 million barrels, distillates – by 1 million barrels.
“Drunken gasoline inventories suggest that the economy and driving may not be as bad as expected,” said Michael Lynch, president of Strategic Energy & Economic Research.
Meanwhile, the ICE-calculated index, which shows the dynamics of the dollar against six major world currencies, fell 1.2% the day before. Wednesday’s rise in oil prices “was actually the result of the dollar’s decline,” Phil Flynn, senior analyst at The Price Futures Group, told MarketWatch.
Oil prices are rising on Friday morning due to rumors about a possible easing of anti-COVID restrictions in China.
The price of December futures for Brent on the London ICE Futures exchange by 8:13 am CST is $92.90 per barrel, which is $0.42 (0.45%) higher than the closing price of the previous session. As a result of trading on Thursday, these contracts fell by 3 cents to $92.38 per barrel.
The price of futures for WTI oil for December in electronic trading on the New York Mercantile Exchange (NYMEX) is $84.98 per barrel by this time, which is $0.47 (0.56%) higher than the final value of the previous session. By the close of the last session, the contract fell 1 cent to $84.51 per barrel.
A positive factor for the oil market was the news about a possible easing of quarantine regulations for tourists in China. The quarantine period could be reduced to 7 days from the current 10, Bloomberg wrote.
Rumors of an easing of restrictive measures in China were perceived by investors as a signal of a potential curtailment of the policy of “zero tolerance” for the coronavirus, which in turn could spur economic growth and increase demand for fuel in the country, writes The Wall Street Journal.
“China was expected to increase oil imports, but there is no increase in spot market activity from the world’s second largest economy,” said StoneX Group analyst Harry Altham. “Such measures could revive the economy, suffering from anti-COVID restrictions, and become a lifeline for struggling air carriers.
Earlier, US President Joe Biden decided to release 15 million barrels from the strategic reserve (SPR) in December.
“Given that this is part of a previously announced large-scale release, the impact on the market is minimal. Such a measure is unlikely to offset the effect of OPEC+ supply cuts,” ING analyst Warren Patterson wrote.
