Benchmark crude oil prices continue to fall.
The market is under pressure from extremely uncertain forecasts for global demand amid an expected increase in supplies, especially from non-OPEC countries, Trading Economics reports.
The price of March futures for Brent on the London ICE Futures exchange at 7:07 a.m. CT is $75.84 per barrel, which is $0.05 (0.07%) lower than at the close of the previous session. On Tuesday, these contracts fell by $1.15 (1.5%) to $75.89 per barrel.
Quotations for February futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) on Wednesday morning fell by $0.06 (0.09%) to $70.32 per barrel. At the end of the previous session, they fell by $1.27 (1.8%) to $70.38 per barrel.
Traders’ attention is focused on the prospects for global oil demand and whether the central banks of the world’s leading countries will be able to ensure a “soft landing” of their economies, said Craig Earlam, senior market analyst at OANDA, as quoted by MarketWatch.
Demand is expected to “remain low due to the global economic downturn and record oil production in the United States,” said Haralampos Pissouros, senior investment analyst at XM.
Oil prices are moderately rising on Friday morning after a sharp decline in the previous session.
The price of March futures for Brent on the London ICE Futures exchange by 7:09 a.m. is $77.59 per barrel, which is $0.44 (0.57%) higher than at the close of the previous session. On Thursday, these contracts fell by $2.39 (3%) to $77.15 per barrel.
Quotes for February futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) by this time increased by $0.31 (0.43%) to $72.08 per barrel. At the end of the previous session, they fell by $2.34 (3.2%) to $71.77 per barrel.
Analysts say the main reason for the drop in oil prices on the eve of the previous day is the reduction of fears about attacks by Yemeni Houthis on transport vessels. In particular, on Wednesday, the Danish transport and logistics company A.P. Moeller-Maersk AS announced the resumption of transportation through the Red Sea after the implementation of an international mission to ensure security in the region.
“Oil prices have fallen as global transportation giants prepare to resume navigation in the Red Sea despite attacks by Houthi rebels,” wrote Stephen Innes, managing partner of SPI Asset Management. – “It’s a calculated risk and a bet on the success of the international security mission.
The quotes could not be supported by the data on oil and oil products stocks in the United States published the day before.
Commercial oil reserves in the United States last week fell by 6.911 million barrels, while analysts on average had forecast a decline of 2.7 million barrels, according to Trading Economics. The decline in stocks was a record for four months.
Stocks at the Cushing terminal, where NYMEX-traded crude is stored, increased by 1.508 million barrels. This is the tenth consecutive week that Cushing stockpiles have increased, which has not been seen since 2016.
Oil prices stabilized on Thursday after falling the day before on signals that the supply of crude oil on the market exceeds demand.
Data from the American Petroleum Institute (API), released on Wednesday night, showed an increase in US stocks last week by 1.837 million barrels. In particular, stocks increased at the Cushing terminal, where oil traded on the Nymex is stored.
The official data on energy reserves will be released by the US Department of Energy on Thursday at 18:00 p.m. If confirmed, the increase in Cushing oil reserves will be recorded for the tenth consecutive week, which will be the longest period of continuous growth since 2016.
The cost of February futures for Brent oil on the London ICE Futures exchange as of 7:20 a.m. amounted to $79.61 per barrel, which is $0.04 (0.05%) lower than at the close of the previous trading. As a result of trading on Wednesday, these contracts fell by $1.42 (1.8%) to $79.65 per barrel.
Futures for WTI for February in electronic trading on the New York Mercantile Exchange (NYMEX) fell by $0.09 (0.12%) to $74.02 per barrel. The day before, the value of contracts fell by $1.46 (1.9%) to $74.11 per barrel.
Concerns about the outlook for demand, especially in China, are growing, says CIBC Private Wealth analyst Rebecca Babin, quoted by Market Watch. Oil consumption in China, which was quite high in the first three quarters of this year, is weakening, she notes.
“Lack of confidence in the prospects for the Chinese economy in 2024 is the main factor that worries market participants,” Babin said. – “The second most important factor is the possibility that US production will exceed forecasts, as it did in 2023.
Oil prices are correcting downward after updating December highs the day before, investors continue to assess the situation in the Red Sea.
The cost of February futures for Brent crude oil on London’s ICE Futures exchange as of 7:03 a.m. Q2 is $81.04 per barrel, which is $0.03 (0.04%) lower than at the close of the previous session. At the end of previous trading, these contracts rose by $2 (2.5%), to the maximum since November 30, $81.07 per barrel.
WTI crude oil futures for February at the electronic trading of the New York Mercantile Exchange (NYMEX) fell by $0.15 (0.2%) to $75.42 per barrel. On Tuesday, those contracts were up $2.01 (2.7%) to $75.57 a barrel, also the highest since Nov. 30.
Yemen’s Houthi rebels have attacked another cargo ship in the Red Sea, Al-Arabiya TV reported Tuesday, citing rebel military spokesman Yahya Sarea. He said the crew of the commercial ship MSC United ignored warning signals three times, after which the rebels fired rockets at it.
Also on Tuesday, the United Kingdom’s Office of Maritime Trade Operations said there were explosions and rocket launches in the Red Sea near the port of Hodeida.
Earlier, Danish transportation and logistics company A.P. Moeller-Maersk AS said it plans to resume shipping in the Red Sea after an international ship security mission. Managing partner of SPI Asset Management Stephen Innes, whose words are quoted by MarketWatch, called the mission a positive step toward restoring safe maritime transportation in the region.
Oil prices are moderately falling on Tuesday afternoon amid low trading activity after Christmas.
The cost of February futures for Brent on the London ICE Futures exchange as of 13:15 pm is $78.96 per barrel, which is $0.11 (0.14%) lower than at the close of the previous trading.
Futures for WTI for February in electronic trading on the New York Mercantile Exchange (NYMEX) have fallen by $0.29 (0.39%) to $73.27 per barrel by this time.
Downward pressure on the quotes is exerted by the strengthening of the US dollar. The DXY index, which reflects its value against six major world currencies, is up less than 0.1%, which reduces the attractiveness of commodities quoted in US currency.
Oil prices are rising on Friday and ending the week with steady growth due to problems with the transportation of energy resources through the Red Sea.
The movement of tankers in the Red Sea has sharply decreased due to attacks by Yemeni Houthis on ships.
The cost of February futures for Brent on the London ICE Futures exchange as of 7:20 a.m. is $80.04 per barrel, which is $0.65 (0.82%) higher than at the close of the previous session. As a result of previous trading, these contracts fell by $0.31 (0.4%) to $79.39 per barrel.
Futures for WTI for February in electronic trading on the New York Mercantile Exchange (NYMEX) rose by $0.6 (0.81%) to $74.49 per barrel by this time. On Thursday, these contracts fell by $0.33 (0.4%) to $73.89 per barrel.
Since the beginning of this week, Brent has risen in price by 4.5%, WTI – by 3%.
On Thursday, oil prices fell on the information about Angola’s withdrawal from OPEC, where the country had been a member for 16 years. This decision of Angola indicates the existence of serious contradictions in OPEC, which is trying to limit production to support oil prices, Market Watch notes.
“At first glance, Angola’s withdrawal from OPEC is not such a big deal, given that the country could barely meet its production quota,” said Price Futures Group analyst Phil Flynn.
“The concern, however, is that Angola’s withdrawal could signal latent tensions over OPEC ceding market share to non-member producers,” he said, according to Market Watch.
