Benchmark oil prices rose weakly on Friday morning after a sharp decline the day before, driven by a stronger dollar and worries about global fuel demand.
The price of November futures for Brent oil on the London ICE Futures exchange by 8:08 am UTC on Friday is $91.19 per barrel, which is $0.35 (0.39%) higher than the closing price of the previous session. As a result of trading on Thursday, these contracts fell by $3.26 (3.5%) to $90.84 per barrel.
The price of futures for WTI oil for October in the electronic trading of the New York Mercantile Exchange (NYMEX) is $85.30 per barrel by this time, which is $0.20 (0.24%) higher than the final value of the previous session. By the close of the market the day before, the value of these contracts fell by $3.38 (3.8%) to $85.10 per barrel.
“The dollar has rebounded strongly and is holding near recent highs amid a hawkish Fed policy outlook for the coming months,” StoneX energy analysts wrote in a note.
The September Fed meeting will take place next week, and the market is confident that the central bank will again raise its key rate by 75 basis points to slow down the continued high inflation in the US.
“For the near term, we remain cautious on oil prices as the global economy is under pressure from rising rates, undermining fuel demand,” Peter Cardillo, senior market economist at Spartan Capital Securities, wrote in a note.
Oil prices are slightly reduced in trading on Thursday after a steady rise in the previous session.
Traders are keeping an eye on the situation in China, as well as evaluating the announcement of the US Department of Energy regarding plans to replenish the Strategic Petroleum Reserve (SPR).
The authorities of Chengdu, the capital of Sichuan province, are preparing to ease quarantine restrictions in certain areas of the city, which is home to 21 million people, Bloomberg reports.
On the eve of the International Energy Agency (IEA) said that the demand for oil in China in 2022 may decline for the first time since 1990 due to tough measures taken by the authorities to curb the spread of coronavirus. According to the IEA forecast, oil demand in China will decrease by 2.7% this year.
The price of November futures for Brent oil on the London ICE Futures exchange by 8:20 q.m. on Thursday is $93.9 per barrel, which is $0.2 (0.21%) lower than the closing price of the previous session. As a result of trading on Wednesday, these contracts rose by $0.93 (1%) to $94.1 per barrel.
The price of futures for WTI oil for October in the electronic trading of the New York Mercantile Exchange (NYMEX) is $88.41 per barrel by this time, which is $0.07 (0.08%) lower than the final value of the previous session. By the close of the market the day before, the value of these contracts increased by $1.17 (1.3%) to $88.48 per barrel.
The U.S. Department of Energy said on Wednesday that it could start replenishing the Strategic Petroleum Reserve (SPR) only after fiscal year 2023, which begins on October 1. Earlier, Bloomberg reported, citing sources, that the US intends to start replenishing the SPR when oil prices fall below $80 per barrel. The Ministry of Energy noted that its plan for SPR does not provide for a trigger price that should provoke oil purchases.
Oil prices are falling on Tuesday after rising the day before. The pressure on the market is exerted by continuing fears of a decrease in demand due to strict quarantine restrictions in China. The European Union, meanwhile, is preparing a plan to reduce energy consumption in the face of falling gas supplies from Russia.
“We do not think that we can expect a sustainable rally in the market in the near future,” Morgan Stanley’s expert review, quoted by Bloomberg, says. is already reflected in market statistics, and China is a particularly important contributor.”
The cost of November futures for Brent crude on the London ICE Futures exchange by 8:10 am CST on Tuesday is $93.7 per barrel, which is $0.3 (0.32%) lower than the closing price of the previous session. As a result of trading on Monday, these contracts rose by $1.16 (1.3%) to $94 per barrel.
The price of futures for WTI oil for October in the electronic trading of the New York Mercantile Exchange (NYMEX) is $87.58 per barrel by this time, which is $0.20 (0.23%) lower than the final value of the previous session. By the close of the market the day before, the value of these contracts increased by $0.99 (1.1%) to $87.78 per barrel.
The US reaffirmed on Monday that it does not see the possibility of reaching an agreement on the restoration of the Joint Comprehensive Plan of Action soon.
US Secretary of State Anthony Blinken said that he considers the restoration of the JCPOA in the near future unlikely due to Tehran’s position. Last Saturday, Germany, France and the UK expressed “serious doubts” about Iran’s sincerity in seeking to renew the JCPOA and warned that the country’s stance jeopardized the prospects for a deal.
Oil quotes add about 2% during trading on Friday, recovering after falling the day before.
Meanwhile, prices for both brands could show their biggest weekly decline in four weeks amid fears of a recession in the global economy and the consequences of another lockdown in China, writes Trading Economics.
The price of November futures for Brent on the London ICE Futures exchange by 8:10 a.m. on Friday is $94.22 per barrel, which is $1.86 (2.01%) higher than the closing price of the previous session. As a result of trading on Thursday, these contracts fell by $3.28 (3.4%) to $92.36 per barrel.
The price of futures for WTI oil for October in the electronic trading of the New York Mercantile Exchange (NYMEX) is $88.38 per barrel by this time, which is $1.77 (2.04%) higher than the final value of the previous session. By the close of the market the day before, the cost of these contracts decreased by $2.94 (3.3%) to $86.61 per barrel.
As reported, the finance ministers of the G7 countries at a meeting on Friday plan to approve and outline their plan to set a price limit for Russian oil.
Oil prices are rising on Wednesday, recovering slightly after the collapse the day before.
The cost of October futures for Brent on London’s ICE Futures is $100.01 per barrel by 8:06 a.m. on Wednesday, which is $0.7 (0.7%) higher than at the close of the previous session. As a result of trading on Tuesday, these contracts fell by $5.78 (5.5%) to $99.31 per barrel.
October Brent futures expire at the close of the session on Wednesday. More actively traded November contracts added $0.94 (0.96%) in price, trading at $98.78 per barrel.
The price of futures for WTI oil for October in the electronic trading of the New York Mercantile Exchange (NYMEX) is $92.51 per barrel by this time, which is $0.87 (0.95%) higher than the final value of the previous session. By the close of the market the day before, the cost of these contracts decreased by $5.37 (5.54%) to $91.64 per barrel.
Experts from the OPEC+ technical committee have raised their estimate of the oil surplus in 2022 from 0.8 million bpd to 0.9 million bpd, according to reports prepared for the meeting of the technical committee scheduled for August 31, which Interfax has read.
Based on the reporting, experts downgraded their estimate of oil demand growth in 2022 under the baseline scenario from 3.4 million b/d to 3.1 million b/d, to 100 million b/d; growth in supply – from 5.8 million b/d to 5.6 million b/d to 100.9 million b/d.
Traders, meanwhile, are waiting for the US Department of Energy’s weekly report on commercial stocks of oil, gasoline and distillates in the country, which will be released later on Wednesday.
Experts on average expect oil inventories to fall 1.9 million barrels, gasoline more than 1.3 million barrels and distillates nearly 1.2 million barrels, according to a S&P Global Commodity Insights survey.
Oil prices are rising on Monday, traders are watching the situation in Libya, as well as the progress of negotiations on the Iranian nuclear deal.
Over the weekend, clashes between two armed groups took place in Tripoli, as a result of which more than 20 people were killed, Bloomberg reports. This raised fears that Libya is waiting for another full-scale conflict, as a result of which oil supplies to the world market will be reduced.
Iran, meanwhile, will continue to study US proposals for a nuclear deal until at least September 2, state news agency Nour News reported.
The cost of October futures for Brent oil on the London ICE Futures exchange by 8:15 am CST on Monday is $101.88 per barrel, which is $0.89 (0.88%) higher than the closing price of the previous session. As a result of trading on Friday, these contracts rose by $1.65 (1.7%) to $100.99 per barrel.
The price of futures for WTI oil for October in the electronic trading of the New York Mercantile Exchange (NYMEX) is $94.06 per barrel by this time, which is $1 (1.07%) higher than the final value of the previous session. By the close of the market on Friday, the value of these contracts increased by $0.54 (0.6%) to $93.06 per barrel.
As a result of the past week, Brent has risen in price by 4.4%, WTI – by 2.9%.
“Despite the hawkish stance of the world’s largest central banks, which means further hikes in interest rates and weakening economic growth, oil continues to rise in price as the balance of supply and demand speaks in favor of higher prices,” said James Whistler, managing director of Vanir Global Markets Pte in Singapore. “The possibility of OPEC production cuts remains, as Libya and Congo support the position of Saudi Arabia, while the problem of oil supplies from Kazakhstan also remains,” Bloomberg quoted the expert as saying.
