Oil prices of benchmark grades are moderately rising on Thursday morning after rising at the end of the previous session, caused by the fall of the dollar.
The price of September futures for Brent on London’s ICE Futures exchange at 8:18 a.m. Q2 is $80.3 per barrel, up 19 cents (0.24%) from the previous session’s close. On Wednesday, these contracts rose by $0.71 (0.9%) – to $80.11 per barrel, having updated the maximum since the end of April.
Quotes of futures for WTI crude oil for August at the electronic trading of the New York Mercantile Exchange (NYMEX) by the specified time rose by 14 cents (0.18%) and amounted to $75.89 per barrel. At the end of the previous session they rose by $0.92 (1.2%) – to $75.75 per barrel.
On the eve it became known that the growth rate of consumer prices in the U.S. slowed to 3% in June from 4% in May, having updated the minimum since March 2021. Analysts on average expected a decline to 3.1%.
Oil traders are keeping an eye on easing inflationary pressures as this may result in the Federal Reserve (Fed) having no need to raise interest rates further, meaning “the current positive conditions in the economy may persist for some time,” said Colin Cieszynski, senior strategist at SIA Wealth Management.
“This has helped raise demand expectations, while supply from Saudi Arabia and Russia remains subdued,” he added.
The prospect of an imminent end to the U.S. monetary tightening cycle collapsed the dollar, which supported commodity prices. The ICE index, which shows the dollar’s performance against six major currencies, plunged 1.2% the day before, hitting its lowest level in more than a year.
The U.S. Department of Energy report, which indicated a sharp increase in oil reserves in the country last week – by almost 6 million barrels instead of the expected increase by 483 thousand barrels.
Gasoline inventories remained virtually unchanged, while distillate stocks rose by 4.815 million barrels. Experts surveyed by Trading Economics on average forecasted a decrease of 727 thousand barrels and 262 thousand barrels, respectively.
Stocks at the terminal in Cushing, where oil traded on Nymex is stored, decreased by 1.605 million barrels over the week.
Oil prices are rising weakly on Wednesday morning ahead of the publication of the US Department of Energy report on energy stocks in the country.
Traders’ attention is also directed to the data on the dynamics of consumer prices in the States for June, which is expected to influence the decisions of the Federal Reserve at the nearest meetings.
Inflation data will be published at 15:30 Q2, the report of the Ministry of Energy on energy stocks – at 17:30 Q2.
The cost of September Brent crude futures on the London-based ICE Futures exchange at 8:15 Q2 on Wednesday is $79.49 per barrel, up $0.09 (0.11%) from the previous session’s closing price. On Tuesday, these contracts rose $1.71 (2.2%) to $79.4 per barrel.
The price of WTI oil futures for August at the electronic trading of the New York Mercantile Exchange (NYMEX) increased by $0.1 (0.13%) to $74.93 per barrel. The day before, the cost of contracts rose by $1.84 (2.52%), to $74.83 per barrel.
Data from the American Petroleum Institute (API), released on Tuesday night to Wednesday, showed an unexpected increase in U.S. inventories in the week ended July 7. The indicator increased by 3.026 million barrels, while experts surveyed by Trading Economics, on average, expected its decline by 200 thousand barrels.
A week earlier, oil reserves fell by 4.382 million barrels.
Oil prices are rising on Tuesday thanks to China’s announced measures to support the real estate market, whose problems continue to hold back the country’s economic growth.
The People’s Bank of China (Central Bank) will expand its program to support developers, including encouraging banks to extend loans to representatives of the sector to complete housing projects, Market Watch reports.
The attention of traders this week is directed to the data on the dynamics of consumer prices in the U.S. for June, as well as monthly reports of OPEC and the International Energy Agency (IEA).
The cost of September Brent crude futures on the London-based ICE Futures exchange by 8:20 Moscow time on Tuesday is $78.08 per barrel, up $0.39 (0.50%) from the previous session’s closing price. On Monday, these contracts fell $0.78 (1%) to $77.69 per barrel.
The price of WTI oil futures for August at the electronic trading of the New York Mercantile Exchange (NYMEX) increased by $0.41 (0.56%) to $73.4 per barrel. The previous day, the value of these contracts fell by $0.87 (1.2%), to $72.99 per barrel.
“New stimulus for the Chinese real estate market is supporting the oil market,” said Warren Patterson, who is in charge of commodities strategy at ING Groep NV. – U.S. inflation data to be released on Wednesday could determine the market’s direction in the short term as it will show what to expect from the Fed in the coming months.”
Benchmark oil prices are falling Monday morning after a three-month record rise at the end of last week.
The price of September futures for Brent on the London-based ICE Futures exchange at 8:18 a.m. Q4 is at $78.02 a barrel, down 45 cents (0.57%) from the previous session’s close. On Friday, these contracts rose by $1.95 (2.6%) – to $78.47 per barrel, having updated the maximum since May 1.
Quotes of futures for WTI crude oil for August at the electronic trading of the New York Mercantile Exchange (NYMEX) by the specified time decreased by 47 cents (0.64%) and amounted to $73.39 per barrel. At the end of the previous session they rose by $2.06 (2.9%) – to $73.86 per barrel.
Last week Brent rose in price by 4.1%, WTI – by 4.6%.
Positive factors for the oil market were the data on the third consecutive weekly reduction of inventories in the United States and the news about the extension of voluntary production cuts by Saudi Arabia.
As reported, commercial oil reserves in the U.S. last week decreased by 1.5 million barrels. Experts surveyed by S&P Global Commodity Insights, on average, predicted a decline of 3.6 million barrels.
Saudi Arabia announced the extension of a voluntary oil production cut of 1 million bpd for August. Thus, the country’s production in August will remain at around 9 mln bpd.
Saudi Arabia will increase prices in August for all oil grades for US, Northwest Europe and Mediterranean customers as well as for some grades for Asian customers.Saudi Arabia raises oil prices slightly for US and Europe
The most significant price increases will be for customers from the Mediterranean (1-1.1%) and Northwest Europe (0.8%). For the US, Saudi oil will rise by 0.1%.
The cost of the main grade supplied to Asia, Arab Light, will increase by $0.2 per barrel next month. As a result, it will be $3.2 a barrel more expensive than the Oman and Dubai oil basket.
EUROPE, OIL, SAUDI ARABIA, US
The market is supported by the data on decrease of reserves in the USA, published the day before, as well as the information on increase of prices for most grades of oil by Saudi Arabia for the buyers from all regions.
The September futures for Brent crude oil on London’s ICE Futures Exchange stood at $76.85 per barrel by 8:15 a.m. on Friday, $0.33 (0.43%) above the previous session’s closing price. Those contracts fell $0.13 (0.2%) to $76.52 a barrel on Thursday.
The price of WTI futures for August at electronic trades of NYMEX grew by $0.32 (0.45%) up to $72.12 per barrel by that time. The price of these contracts remained practically unchanged the day before and amounted to $71.8 per barrel by market close.
According to U.S. Department of Energy, last week commercial oil inventories in the country decreased by 1.5 mln barrels to 452.2 mln barrels. Gasoline inventories decreased by 2.5 million barrels and distillates by 1 million barrels.
Experts polled by S&P Global Commodity Insights, on average, predicted a 3.6 million barrels reduction of oil reserves, 1.7 million barrels of gasoline and 700,000 barrels of distillates.
Stocks at Cushing terminal, which stores crude oil traded on Nymex, decreased by 400,000 barrels to 42.8 million barrels over the week.
Saudi Arabia will raise prices for all grades of crude in August for customers in the United States, Northwest Europe and the Mediterranean, as well as some grades for customers in Asia, state-run Saudi Aramco said Thursday.
“Macroeconomic uncertainty and concerns about the pace of China’s economic recovery are impediments to a further rebound in oil prices,” said ING analyst Warren Patterson.
“Expectations of a stronger Federal Reserve hawkish mood are also not supporting risk appetite,” Market Watch quotes the expert as saying.
