Oil prices are showing moderate growth on Monday morning after a sharp decline last week.
The cost of May futures for Brent on the London ICE Futures exchange at 7:02 a.m. is $83.11 per barrel, which is $0.33 (0.4%) higher than the price at the close of the previous session. As a result of trading last Friday, these contracts rose by $1.19 (1.5%) to $82.78 per barrel.
The price of WTI futures for April in electronic trading on the New York Mercantile Exchange (NYMEX) is currently $77.01 per barrel, which is $0.33 (0.43%) higher than the final value of the previous session. Last Friday, the contract rose in price by $0.96 (1.3%) to $76.68 per barrel.
At the end of last week, Brent fell by 3.6%, WTI – by 3.8%.
The main negative factor for the oil market last week was the fear of a more aggressive monetary policy of the Federal Reserve. Federal Reserve Chairman Jerome Powell said that the central bank would have to raise rates more than previously expected to fight inflation.
In addition, on Friday it became known that the American bank Silicon Valley Bank came under the control of the Federal Deposit Insurance Corporation (FDIC). The FDIC will sell the assets of Silicon Valley Bank, which will allow it to make payments on uninsured deposits.
“Fears of further tightening of the SAR and risks in the financial industry have raised concerns about demand,” said Charu Chanana, market strategist at Saxo Capital Markets Pte. Charu Chanana, a market strategist at Saxo Capital Markets Pte.
Meanwhile, the number of operating oil rigs in the United States last week decreased by 2 units to 590, according to oilfield services company Baker Hughes. The number of rigs declined for the fourth week in a row, updating the lowest level since June last year.
Oil prices are rising in trading Tuesday morning.
The value of May futures for Brent on London’s ICE Futures Exchange stands at $86.42 a barrel by 7:05 a.m., $0.24 (0.28%) above the previous session’s closing price. Those contracts rose $0.35 (0.4%) to $86.18 a barrel on Monday.
The price of WTI April futures grew by $0.21 (0.26%) to $80.67 per barrel at electronic trades of NYMEX by that time. At the end of previous session the contracts value grew by $0.78 (1%) up to $80.46 per barrel.
The oil market was declining for most of the day on Monday amid weaker than investors expected forecast of the Chinese authorities on the economic growth in the country in 2023, however closer to the end of trading turned to the growth.
The statement of the general director of American Pioneer Natural Resources Co. Scott Sheffield, CEO of U.S. Pioneer Natural Resources Co. said that shale oil and gas production in the Permian Basin will reach its peak level in five to six years. That’s because the best areas of the field for drilling and production are depleted, Sheffield told Bloomberg during a CERAWeek event in Houston.
Mizuho Securities USA analyst Robert Yager drew investors’ attention to Saudi state company Saudi Aramco’s price hike for European and Asian buyers for almost all grades of oil in April. “The price of the main oil grade supplied to Asia increased for the second month in a row, indicating expectations of increased demand in that region,” Yager said.
Oil prices are declining Monday morning after a strong rise last week.
The price of Brent futures for May on London’s ICE Futures Exchange stood at $85.07 per barrel by 7:11 a.m., $0.76 (0.89%) lower than at the close of the previous session. Those contracts rose $1.08 (1.3%) to $85.83 a barrel at the close of trading last Friday.
The price of WTI futures for April at the electronic trading on the New York Mercantile Exchange (NYMEX) is $78.96 per barrel by that time, which is $0.72 (0.9%) lower than the final value of the previous session. The contract rose by $1.52 (1.9%) to $79.68 per barrel on Friday.
Brent gained 3.6% and WTI gained 4.4%.
Oil prices last week were supported by optimism about the economic recovery in China and some weakening of US dollar.
Meanwhile, the number of active oil rigs in the U.S. fell by 8 units to 592 last week, oil services company Baker Hughes said. The number of rigs fell to its lowest since last September.
Oil prices rose on Friday for the second consecutive session, despite data from the U.S. Department of Energy on a significant increase in oil inventories in the country.
April Brent crude futures on London’s ICE Futures exchange stood at $82.91 a barrel by 7:10 a.m. Friday, up $0.7 (0.85%) from the previous session’s close. Those contracts rose $1.61 (2%) to $82.21 a barrel on Thursday.
The price of WTI futures for April oil grew by $0.66 (0.88%) to $76.05 per barrel at electronic trades of the New York Mercantile Exchange (NYMEX) by that time. At the end of previous session the cost of contracts grew by $1.44 (2%) to $75.39 per barrel.
Commercial oil inventories in the United States rose 7.65 million barrels last week to 479.04 million barrels, the highest since May 2021, the nation’s Energy Department’s weekly report showed.
Stocks at the Cushing terminal, where NYMEX traded crude oil is stored, rose for the eighth straight week to their highest since June 2021.
Distillate stocks increased by 2.7 million barrels, while gasoline reserves unexpectedly declined by 1.86 million barrels.
The oil market has remained in a narrow price range – about $11 per barrel – since the beginning of 2023. On the one hand, it is supported by expectations of increased demand in China after the lifting of quarantine restrictions and fears of supply reduction in the market due to the reduction of Russian production. On the other hand, the market fears weakening of the American economy amid tightening of the monetary policy by the Federal Reserve System (FRS), notes Bloomberg.
“A stronger increase in business activity in China is needed for a solid rebound in oil prices,” notes Saxo Capital Markets analyst Charo Chanana.
Oil prices are rising Monday morning, recovering from last week’s sharp decline.
The price of April futures on London’s ICE Futures Exchange stood at $83.38 a barrel by 7:05 a.m., $0.38 (0.46%) above the previous session’s closing price. Those contracts fell by $2.14 (2.5%) to $83 a barrel at the close of trading last Friday.
The price of WTI futures for March at the electronic exchange of New York Mercantile Exchange (NYMEX) by that time is $76.68 per barrel, which is $0.34 (0.45%) above the final value of the previous session. At that time the contract went down in price by $2.15 (2.7%) to $76.34 per barrel.
Brent was down by 3.9% and WTI by 4.2% at the end of last week. The main negative factor for world markets, including oil market, was tough rhetoric of representatives of major central banks of the world, which increased the likelihood of new rate hikes, writes MarketWatch.
“Oil has been caught between a hammer and anvil, or in other words, between the Fed and a hard landing,” said SPI Asset Management managing partner Stephen Innes.
Meanwhile, the number of active oil rigs in the U.S. fell by two last week to 607, oil services company Baker Hughes reported. The number of gas rigs increased by one unit to 151.
Trading volume on Monday is likely to be lower than usual as U.S. exchanges are closed in observance of Presidents’ Day.
Oil prices are falling on Friday as signals of crude glut in the U.S. outweigh expectations of demand growth in China, Bloomberg writes.
The cost of April futures for Brent crude oil on London’s ICE Futures exchange is $84.27 a barrel by 7:15 a.m. on Friday, down $0.87 (1.02%) from the previous session’s closing price. Those contracts fell $0.24 (0.3%) to $85.14 a barrel on Thursday.
March futures on WTI crude oil at electronic trades of NYMEX fell by that time by $0.85, to $77.64 per barrel. The previous session’s contract value was down $0.1 (0.1%) to $78.49 a barrel.
“Investors are trying to assess which of the major oil market drivers will prove the most influential in the next few months,” said CIBC Private Wealth senior trader Rebecca Babin.
Major Chinese air carriers announced a significant increase in flight loadings, indicating an upturn in tourist activity, Bloomberg notes.
Meanwhile, oil refining companies in China are increasing their purchases of raw materials. According to the agency’s sources, the trading “subsidiary” Sinopec bought 10 million barrels of oil in the UAE with delivery in April. A number of other Chinese refiners, including China National Chemical Corp. and Rongsheng Petrochemical Co. are also increasing their oil purchases, including from the United States.
At the same time, the U.S. Energy Department said Wednesday that the country’s oil inventories jumped 16.28 million barrels last week. Experts predicted an average increase of 2 million barrels.
U.S. Energy Department data this year “consistently give bearish signals to the market, pointing to weak consumer demand, low refinery activity and rising oil inventories,” analysts say Sevens Report Research.
