Oil prices are rising on Friday after declining the day before. Investors continue to gauge the economic outlook for the U.S. and China, Trading Economics noted.
The cost of July futures for Brent on London’s ICE Futures Exchange is $76.53 a barrel by 8:16 a.m. on Friday, up $0.67 (0.88%) from the previous session’s closing price. Those contracts fell $1.1 (1.4%) to $75.86 a barrel on Thursday.
The price of WTI futures for June oil grew by $0.56 (0.78%) up to $72.42 per barrel at electronic auctions of New York Mercantile Exchange (NYMEX) by that time. At the end of previous session the contracts value has fallen by $0.97 (1.3%) down to $71.86 per barrel.
It has become clear in recent months that trends in the oil market are driven more by concerns about demand than supply, Colin Cieszynski, chief market strategist at SIA Wealth Management, told MarketWatch.
“In recent days, concerns about banks have given way to concerns about the (U.S. – IF-U) government debt ceiling,” Cieszynski explained. – The approach (of the negotiating parties – IF-U) to reaching an agreement aimed at avoiding a default on U.S. debt has supported stock markets and appears to be providing some support for the oil market as well.”
U.S. President Joe Biden, speaking earlier at the White House, said he was confident that “we will have an agreement and the U.S. will not default.
Oil prices are rising on Tuesday morning after a rebound in the previous session, while before that quotations had been falling for three days in a row.
The price of July futures for Brent on London’s ICE Futures Exchange stood at $75.57 per barrel by 8:07 a.m., $0.34 (0.45%) above the close of the previous session. Those contracts rose $1.06 (1.4%) to $75.23 a barrel on Monday.
The price of WTI futures for June oil grew by $0.27 (0.38%) to $71.38 per barrel at electronic auctions of New York Mercantile Exchange (NYMEX) by that time. The day before the contracts value grew by $1.07 (1.5%) to $71.11 per barrel.
The strong macroeconomic data from China were a positive factor for the market, though it turned out to be worse than the market forecasts.
As it was reported, the industrial production in China in April increased by 5.6% compared to the same month last year after growth by 3.9% in March. Meanwhile, retail sales soared 18.4% last month after rising 10.6% a month earlier.
Analysts on average had forecast a 10.9% increase in industrial production and a 21% increase in retail sales, according to Trading Economics.
Also, the market is supported by hopes that the White House and Congress will be able to agree on raising the U.S. debt ceiling.
Negotiations on the debt ceiling between President Joe Biden and Republican House Speaker Kevin McCarthy are expected to resume on Tuesday.
Meanwhile, the U.S. Department of Energy announced plans to buy up to 3 million barrels of oil to replenish the strategic reserve. Last spring, Biden announced the sale of 180 million barrels from the reserve to combat fuel shortages in the market.
As of May 5, the volume of oil reserves in the strategic reserve was 362 million barrels, while the maximum possible level was 713 million barrels. The current figure is the lowest since the 1980s, writes MarketWatch.
Oil prices are rising on Monday thanks to some easing of concerns over a possible recession.
A positive factor for the market was Friday’s data on the U.S. labor market, which showed that it remains strong despite a significant tightening of monetary policy by the Federal Reserve (Fed).
“Oil prices have been falling lately because of fears of a global recession, but strong labor market data and positive comments from central bank governors offer hope that a recession can be avoided this year,” said Jamil Ahmad, chief analyst at CompareBroker.io, cited by Market Watch.
Federal Reserve Chairman Jerome Powell said last week that the U.S. economy is likely to continue growing at a moderate pace this year and avoid a recession.
In addition, traders note that China is increasing its oil purchases and demand is likely to remain strong in the next few months due to increased tourist activity in the country.
At the same time, global oil inventories are shrinking and the problem will be exacerbated by OPEC+ production cuts.
July Brent crude futures on London’s ICE Futures exchange stood at $75.7 a barrel by 8:10 a.m. Monday, up $0.4 (0.53%) from the previous session’s closing price. Those contracts rose $2.8 (3.9%) to $75.3 a barrel on Friday.
The price of WTI crude futures for June grew by $0.43 (0.6%) to $71.77 per barrel at electronic auctions of New York Mercantile Exchange (NYMEX) by that time. The contract value grew by $2.78 (4.1%) to $71.34 per barrel at the end of previous session.
Brent was down 6.3% and WTI was down 7.1% at the end of last week.
“The market decline last week was much more significant than one would have expected, judging by the supply-demand balance in the market,” said Citigroup Inc. analyst Ed Morse. Ed Morse. – We can expect oil inventories to decline, given the approach of the summer season, during which demand will rise.”
Oil prices are rising on Thursday after falling by more than 4% in the previous session.
The price of July futures on Brent on London’s ICE Futures Exchange stood at $72.9 a barrel by 8:05 a.m. Thursday, up $0.57 (0.79%) from the previous session’s close. Those contracts fell $2.99 (4%) to $72.33 a barrel on Wednesday, the lowest since December 20, 2021.
The price of futures for June WTI crude oil on the electronic trading on the New York Mercantile Exchange (NYMEX) increased by that time by $0.34 (0.5%) – to $68.94 a barrel. At the end of the previous session, contracts fell $3.06 (4.3%) to $68.6 a barrel, the lowest since March 20.
The oil market has fallen sharply since the beginning of this week on signals of slow economic recovery in China, as well as increased fears of recession in the U.S. due to problems in the banking sector of the country.
“The correlation between tensions in the U.S. banking sector and falling oil prices cannot be denied,” said Price Futures Group chief analyst Phil Flynn, cited by Market Watch.
U.S. Department of Energy data published on Wednesday showed a decline of 1.28 million barrels of commercial oil inventories in the country for the week ended April 28. The decline marked the third week in a row.
Experts polled by S&P Global Commodity Insights expected on average a sharper reduction of 3.3 million barrels.
Stocks at Cushing terminal, which stores oil traded at Nymex, increased by 500,000 barrels, while stocks in the Strategic Petroleum Reserve (SPR) decreased by 2 million barrels.
According to the DOE report, gasoline inventories in the States rose by 1.74 million barrels last week, while distillates fell by 1.19 million barrels.
Oil prices are stable in trading on Tuesday after declining the day before on increased fears of declining demand.
The price of July futures for Brent on London’s ICE Futures Exchange stood at $79.27 a barrel by 8:05 a.m. Tuesday, down $0.04 (0.05%) from the close of the previous session. Those contracts fell $1.02 (1.3%) to $79.31 a barrel on Monday.
The price of WTI futures for June oil grew by $0.02 (0.03%) to $75.64 per barrel at electronic trades of New York Mercantile Exchange (NYMEX) by that time. The contracts value has decreased by $1.12 (1.5%) to $75.66 per barrel at the end of previous session.
Investors are waiting for the Federal Reserve to raise its benchmark interest rate again this week, worried that further tightening of monetary policy in the U.S. will trigger a global recession, Market Watch noted.
China’s Purchasing Managers’ Index (PMI) for the manufacturing industry fell to a four-month low of 49.2 points in April from 51.9 points in March, data from China’s State Bureau of Statistics (SBS) showed. The value of the index below 50 points indicates a decline in activity in the sector. PMI in April fell below this mark for the first time since December.
In April Brent has fallen in price by 0.3% and WTI has risen by 1.5%.
On Thursday, oil prices for benchmark brands adjusted upward after a strong drop in the previous days.
The decline is due to concerns about the possibility of a recession in the US economy and the resulting decline in fuel demand, Trading Economics writes. In addition, the situation in the banking sector of the country remains tense, which also negatively affects the sentiment of traders.
Meanwhile, the market was supported by data on the reduction of fuel reserves in the United States.
Quotations of June futures for Brent on the London ICE Futures exchange by 8:01 a.m. amounted to $77.93 per barrel, which is $0.24 (0.3%) higher than the price at the previous session’s close. On Wednesday, these contracts fell by $3.08 (3.8%) to $77.69 per barrel.
The price of June futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) rose by $0.18 (0.2%) to $74.48 per barrel in the morning. At the end of the previous session, the value of contracts fell by $2.77 (3.6%) to $74.3 per barrel.
Last week, oil reserves decreased by 5.05 million barrels to 460.91 million barrels, according to the Ministry of Energy. Experts expected a decrease of 1.5 million barrels.
Gasoline reserves decreased by 2.41 million barrels, distillate reserves – by 577 thousand barrels. The average forecast of analysts was for a decrease of 1.5 million barrels and 1.08 million barrels, respectively.
