Oil prices continue to rise moderately on Tuesday morning, recovering from a decline over the past seven weeks.
The price of February futures for Brent on the London ICE Futures exchange at 7:07 a.m. is $76.54 per barrel, which is $0.51 (0.67%) higher than at the close of the previous session. On Monday, these contracts rose in price by 19 cents to $76.03 per barrel.
Quotes for January futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) by this time increased by $0.54 (0.76%) to $71.86 per barrel. At the end of the previous session, they rose by 9 cents to $71.32 per barrel.
Prior to that, both brands had been in the red for seven weeks in a row, which has not been seen since 2018.
The day before, oil rose in price “due to short-term oversold conditions in the futures market” after WTI quotes tested a key resistance level, said Tyler Ritchie, editor of Sevens Report Research. The market was also supported by improved investor sentiment and demand for risky assets, he added.
At the same time, a negative factor was the data that consumer prices in China in November fell by 0.5% in annual terms, the highest rate in three years. Deflation in China was recorded for the second month in a row, which indicates a weakening in demand for raw materials for the industrial sector, Market Watch notes.
“We see that growth is weakening in China, Europe is in recession or on the verge of recession, and the US economy has also slowed down, although not as much as others,” said JonesTrading analyst Mike O’Rourke. – “That’s why the price of WTI remains around $70 per barrel.
Yulia Svyrydenko, First Vice Prime Minister and Minister of Economy of Ukraine, and Peter Kmec, Vice Prime Minister for Recovery, Resilience and Use of European Funds of Slovakia, discussed the possibility of oil supplies through the Odesa-Brody pipeline.
“We discussed the situation at border crossings, bilateral trade, industrial cooperation, and energy. We are inspired by the implemented project to supply oil through Ukraine to Slovakia through the port terminal and pipeline from Odesa,” Svyrydenko wrote on Twitter (X).
According to her, Ukraine is also interested in providing Slovakia with natural gas storage services in its underground storage facilities (UGS).
As part of the Ukrainian delegation’s visit, Ukrtransnafta CEO Volodymyr Tsependa met with a representative of the operator of the Slovak section of the Druzhba pipeline, Transpetrol’s Chairman of the Board of Directors Martin Ruzhynsky.
According to the Ukrainian operator, the parties summarized the results of cooperation in 2023 and discussed plans for organizing transportation work for the next year.
“The results of the year demonstrate well-coordinated cooperation with our European partners. We want to maintain this result in the future, so we discussed all issues related to oil transportation in 2024, in particular, the modes of pumping through the Druzhba pipeline,” Cependa said in a statement.
Benchmark oil prices are showing a moderate rise on Monday morning after declining over the past seven weeks.
The price of February futures for Brent on the London ICE Futures exchange at 7:10 a.m. is $76.36 per barrel, which is $0.52 (0.69%) higher than at the close of the previous session. Last Friday, these contracts rose in price by $1.42 (1.9%) to $75.47 per barrel.
Quotes for January futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) by this time increased by $0.41 (0.58%) to $71.64 per barrel. At the end of the previous session, they rose by $1.89 (2.7%) to $71.23 per barrel.
Last week, the price of Brent fell by 3.9%, while WTI fell by 3.8%. Both brands finished in the red for the seventh week in a row, which has not been seen since 2018.
Since the end of September, oil has fallen in price by about 20%, despite the continuation and deepening of voluntary oil production cuts by OPEC+ countries, including Russia and Saudi Arabia.
Oil market participants also evaluate the data that consumer prices (CPI) in China in November fell by 0.5% year-on-year, the fastest pace since November 2020. The consensus forecast was for a 0.1% decline last month, according to Trading Economics. In October, they fell by 0.2%.
“Price gains are somewhat limited early this week due to concerns about demand in China,” wrote Yip Jun Ron of IG Asia Pte.
Meanwhile, data from the oilfield services company Baker Hughes showed that over the past week, the number of operating oil rigs in the United States decreased by two to 503 units. The number of gas rigs, meanwhile, increased by three to 119, the highest level since September.
Oil prices rose on Friday, but ended the week in the red on fears of lower demand.
The cost of February futures for Brent on the London ICE Futures exchange as of 7:20 a.m. is $75.19 per barrel, which is $1.14 (1.54%) higher than at the close of the previous session. On Thursday, the price of these contracts fell by $0.25 (0.3%) to $74.05 per barrel.
January futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) rose by $0.99 (1.43%) to $70.33 per barrel by this time. As a result of the previous trading, the value of these contracts decreased by $0.04 (less than 0.1%) to $69.34 per barrel.
Both Brent and WTI fell on Thursday for the sixth consecutive session, the longest period of continuous decline since February, Market Watch notes. Prices are at their lowest levels since June.
Futures end in the red for the seventh week in a row, having lost about 5% since the beginning of the week.
“The demand outlook looks weak,” said Ravinda Rao, an analyst at Kotak Securities in Mumbai. – “Economic growth in China has not yet been able to gain traction, while in the West we see a continued decline in industrial activity.
At the same time, traders doubt that the voluntary commitments to reduce production in the first quarter of 2024, undertaken by individual countries of the group, will be fully observed.
Benchmark crude oil is little changed in price on Wednesday morning after falling to lows since early July in the previous session.
The price of February futures for Brent on the London ICE Futures exchange by 7:10 a.m. is $77.20 per barrel, which corresponds to the level at the close of the previous session. The day before, these contracts fell in price by $0.83 (1.1%) to $77.2 per barrel.
Quotations for January futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) by this time fell by 6 cents to $72.26 per barrel. At the end of the previous session, they fell by $0.72 (1%) to $72.32 per barrel.
Both brands ended trading on Tuesday at their lowest levels since July 6.
Market participants and analysts have expressed doubts as to whether OPEC+ countries will comply with the terms of a voluntary 2.2 million barrels per day oil production cut in the first quarter of 2024.
“Last week’s OPEC+ decision was a clear disappointment, both because of the less-than-impressive amount of additional cuts and because of their voluntary nature,” said Tyler Ritchie, editor of Sevens Report Research.
Saudi Energy Minister Prince Abdulaziz bin Salman later noted that production restrictions could be extended if necessary.
“The market did not believe him, because the bears want clearer statements from OPEC+ on long-term plans and assurances that the group will do everything necessary to keep oil prices at least $80 per barrel.”
In addition, investors are evaluating signals about changes in energy reserves in the United States. According to the American Petroleum Institute (API), in the week to December 1, oil reserves in the United States increased by 594 thousand barrels.
Official data from the US Department of Energy will be published at 17:30 on Wednesday. Analysts surveyed by S&P Global Commodity Insights expect, on average, that these data will indicate a decrease in oil reserves by 4.1 million barrels, as well as an increase in gasoline and distillate stocks by 800 thousand barrels.
Benchmark oil prices are little changed during morning trading on Tuesday, and the day before, quotes fell to their lowest levels since mid-November on fears that OPEC+ countries will not fully comply with their commitments to reduce production.
The price of February futures for Brent on the London ICE Futures exchange by 7:10 a.m. was $78.03 per barrel, which corresponds to the level at the close of the previous session. The day before, these contracts fell in price by $0.85 (1.1%) to $78.03 per barrel.
Quotes for January futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) by this time increased by 5 cents to $73.09 per barrel. At the end of the previous session, they fell by $1.03 (1.4%) to $73.04 per barrel.
On Monday, both brands ended trading at their lows since November 16.
Last week, some OPEC+ countries announced a voluntary reduction in oil production by 2.2 million barrels per day in the first quarter of 2024. The reduction in production by OPEC+ will ensure a balance in the oil market in the first quarter of next year, but without further measures in the second quarter, the global market may experience a surplus of 1 million bpd, Citi analysts fear.
In addition, the fact that the oil production restrictions are voluntary raises skepticism about compliance with the terms of the agreement, the analysts added.
