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.
Benchmark oil prices are moderately falling on Friday morning after a sharp decline on Thursday, as investors continue to assess the outcome of the OPEC+ ministerial meeting held the day before.
The price of February futures for Brent on the London ICE Futures exchange at 7:14 a.m. is $80.63 per barrel, which is 23 cents lower than at the close of the previous session. The day before, these contracts fell by $2.02 (2.4%) to $80.86 per barrel.
Quotes for January futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) by this time fell by 4 cents to $75.92 per barrel. At the end of the previous session, they fell by $1.9 (2.4%) to $75.96 per barrel.
OPEC+ did not change the official quotas following the meeting that ended the day before, while some countries of the group will voluntarily reduce production by 2.2 million barrels per day in the first quarter of 2024. Saudi Arabia will reduce production by 1 million bpd, Iraq – by 223 thousand bpd, UAE – by 163 thousand bpd, Kuwait – by 135 thousand bpd, Kazakhstan – by 82 thousand bpd, Algeria – by 51 thousand bpd, Oman – by 42 thousand bpd.
Russia will extend and deepen its existing export restrictions. Until the end of 2023, there will be a 300 thousand bpd restriction on the export of oil and oil products compared to May-June 2023. The Russian authorities have announced that the country will increase this reduction by another 200 thousand bpd to 500 thousand bpd and extend it to the first quarter of 2024, while oil supplies will be reduced by 300 thousand bpd and oil products by 200 thousand bpd.
“Initially, oil prices jumped on the news of the extension and deepening of oil production cuts, but investors are worried about OPEC’s compliance with the terms of the deal, as well as about the growth in global fuel demand,” wrote Rob Hayworth, Chief Strategy Officer at U.S. Bank Asset Management Group.
Benchmark oil prices do not show a single trend on Thursday morning, as traders assess data on US stockpiles and await the OPEC+ ministerial meeting.
The price of January futures for Brent on the London ICE Futures exchange at 7:00 a.m. was $82.95 per barrel, $0.15 (0.18%) lower than at the close of the previous session. The day before, these contracts rose in price by $1.42 (1.7%) to the highest since November 6 at $83.1 per barrel. They will expire at the close of the market on Thursday.
February futures, which are more actively traded, are rising in price by $0.16 (0.19%) to $83.04 per barrel.
Quotations for January futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) by this time increased by $0.18 (0.23%) to $78.04 per barrel. At the end of the previous session, they rose by $1.45 (1.9%) to the highest since November 14 at $77.68 per barrel.
Commercial oil reserves in the United States last week increased by 1.609 million barrels, according to the weekly report of the country’s Energy Ministry published on Wednesday. This came as a surprise to analysts who had forecast an average decline of 933 thousand barrels, according to Trading Economics.
Gasoline reserves increased by 1.764 million barrels, and distillate reserves by 5.217 million barrels. On average, experts had expected an increase in gasoline stocks by 229 thousand barrels and a decrease in distillate reserves by 394 thousand barrels.
For their part, the OPEC+ ministers will try to meet again on Thursday (this time online) to review their strategy in the oil market. A face-to-face meeting of the countries participating in the agreement was scheduled for last Sunday, but was postponed a few days later.
