Benchmark oil prices are rising in the morning on the last working day of summer.
The cost of October futures for Brent on the London ICE Futures exchange as of 8:08 a.m. on Friday is $80.18 per barrel, which is $0.24 (0.3%) higher than at the close of the previous trading. The day before, these contracts rose in price by $1.29 (1.6%) to $79.94 per barrel.
October futures for Brent will expire at the end of the session on Friday. November contracts, which are more actively traded, are rising in price during trading by $0.22 (0.28%) to $79.04 per barrel.
October futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) increased in price by $0.18 (0.24%) to $76.09 per barrel. On Thursday, the contract rose by $1.39 (1.9%) to $75.91 per barrel.
The quotes are supported by tensions in the Middle East. In particular, Israeli Air Force fighters struck several Hezbollah rocket launchers in southern Lebanon that threatened Israel, the Israel Defense Forces (IDF) press service said in a telegram channel.
Another positive factor for the oil market was the statistical data released the day before, which confirmed the stability of the US economy. The estimate of the country’s GDP growth in the second quarter was revised upward to 3% in terms of annualized rates from the previously announced 2.8%.
The rise in oil prices intensified on Friday afternoon in anticipation of a speech by Federal Reserve Chairman Jerome Powell.
Quotes for October futures for Brent on the London ICE Futures exchange by 14:41 by the quarter increased by $1.16 (1.5%) to $78.38 per barrel.
The price of WTI futures for October in electronic trading on the New York Mercantile Exchange (NYMEX) increased by $1.22 (1.67%) to $74.23 per barrel by the specified time.
The day before, both brands rose by 1.5%.
The quotes are supported by expectations of a reduction in the key interest rate in the United States. High rates increase the cost of debt service, which could slow economic activity in the country and reduce demand for fuel.
“The dollar is falling on expectations of a rate cut,” said John Kilduff, partner at Again Capital. – “Everyone is now talking about an upcoming 50 basis point cut in the Fed Funds rate, which would be a significant step.
The market expects to receive new signals about the Fed’s position from Powell’s speech at the annual economic symposium in Jackson Hole, which begins at 17:00 CET.
On Monday, benchmark crude oil prices rose for the fifth consecutive trading session due to fears of possible supply disruptions due to the escalating conflict in the Middle East.
“Tensions in the Middle East, which could escalate at any time and push prices up further, are providing support,” said Barbara Lambrecht, commodities analyst at Commerzbank. According to her, “geopolitical risks are likely to continue to have a significant impact on oil price trends” this week, MarketWatch reports.
In addition, last week’s US statistics were better than expected, which calmed concerns about a possible recession in the country’s economy, Trading Economics writes. They also confirmed traders’ confidence that the Federal Reserve will cut interest rates next month. This may help to increase demand for fuel.
Quotations for October futures for Brent on the London ICE Futures exchange as of 8:01 a.m. amounted to $79.88 per barrel, which is $0.22 (0.3%) higher than the level at the close of the previous trading. On Friday, these contracts rose by $0.5 (0.6%) to $79.66 per barrel.
September futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) are up $0.36 (0.5%) to $77.2 per barrel in the morning. At the end of the previous session, the price of these contracts increased by $0.65 (0.9%) to $76.84 per barrel.
Last week, the price of Brent rose by 3.7%, and WTI by 4.5%. Thus, oil finished the first week of five in the black.
Prices for benchmark crude oil continue to rise on the back of data showing a decline in US fuel stocks for the third week in a row.
Such a long period of decline was last seen in September last year.
The drop in oil reserves exceeded market expectations.
In addition, recent statements by representatives of the Federal Reserve System have increased expectations that the US central bank will cut its base rate in September. This will boost economic growth and, accordingly, lead to an increase in demand for energy resources, Trading Economics writes.
Quotations of September futures for Brent on the London ICE Futures exchange by 8:05 a.m. rose by $0.37 (0.4%) to $85.45. On Wednesday, these contracts rose by $1.35 (1.6%) to $85.08 per barrel.
Prices for August futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) on Thursday morning increased by $0.57 (0.7%) to $83.42 per barrel.
At the end of the previous session, these contracts rose by $2.09 (2.6%) and ended trading at $82.85 per barrel.
Commercial oil inventories in the United States last week decreased by 4.87 million barrels, the country’s Energy Ministry reported.
Gasoline reserves increased by 3.33 million barrels, distillate reserves – by 3.45 million barrels.
Experts had expected an increase in oil reserves by 0.8 million barrels, as well as a decrease in gasoline reserves by 1.7 million barrels and distillate reserves by 0.5 million barrels, according to Trading Economics.
Analysts surveyed by S&P Global Commodity Insights had forecast an increase in oil reserves by 0.54 million barrels and a decrease in gasoline and distillate reserves by 0.7 million barrels and 0.59 million barrels, respectively.
Benchmark oil prices are falling on Tuesday morning after a moderate decline the day before.
The cost of September futures for Brent on the London ICE Futures exchange as of 8:03 a.m. is $84.59 per barrel, which is $0.26 (0.31%) lower than at the close of the previous trading. The day before, these contracts fell in price by $0.18 (0.2%) to $84.85 per barrel.
August futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) fell by $0.31 (0.38%) to $81.60. On Monday, the contract fell by $0.3 (0.4%) to $81.91 per barrel.
A negative factor for the oil market was the weak statistics from China, which indicated a slowdown in China’s GDP growth in the second quarter to 4.7% in annual terms from 5.3% in the previous quarter.
“The growth of the Chinese economy is directly linked to global economic activity and fuel demand,” wrote StoneX analysts led by Alex Hodes.
Traders were also assessing the news of the assassination attempt on Donald Trump, which resulted in the politician being lightly wounded. According to analysts, this event increases his chances of winning the US presidential election in November.
“The Trump government has prioritized energy independence and economic growth over environmental regulation in the past,” said Nigel Green, CEO of deVere Group. – “If he becomes president again, we expect him to take the same approach, which will be positive for the energy sector and especially for fossil fuels.
Oil continues to fall in price on Tuesday.
Traders are assessing the effects of Hurricane Beryl, which hit the Texas coast on Monday, and are following the negotiations between Israel and Hamas.
Expectations that the parties will agree on a ceasefire with the mediation of Qatar and Egypt are putting some pressure on the oil market, according to a review by the StoneX team of experts, as quoted by Market Watch. Analysts, however, note that “such negotiations have failed many times before.”
The cost of September futures for Brent on the London ICE Futures exchange as of 8:15 a.m. is $85.54 per barrel, which is $0.21 (0.24%) lower than at the close of the previous trading. On Monday, these contracts fell by $0.79 (0.9%) to $85.75 per barrel.
August futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) fell by $0.22 (0.27%) to $82.11 per barrel by this time. As a result of the previous session, the value of these contracts decreased by $0.83 (1%) to $82.33 per barrel.
The effects of Hurricane Beryl were less severe than expected. However, some energy infrastructure facilities in Texas are still out of service due to the hurricane’s effects.
Traders’ attention this week is focused on the monthly reviews of the oil market by OPEC and the International Energy Agency.
In addition, the market is waiting for statements from Federal Reserve Chairman Jerome Powell, who will present a semi-annual report on monetary policy to the US Senate Banking Committee on Tuesday.
