Oil prices rise for the third session in a row on data about reduction of fuel reserves in the USA and easing of fears about the crisis in the banking sector, writes MarketWatch.
The cost of May futures for Brent at London’s ICE Futures Exchange is $78.83 a barrel by 8:05 a.m., which is $0.18 (0.23%) above the previous session’s closing price. Those contracts rose $0.53 (0.7%) to $78.65 a barrel at the close of trading on Tuesday.
The price of WTI futures for May at electronic trades on the New York Mercantile Exchange (NYMEX) is $73.64 per barrel by that time, which is $0.44 (0.6%) above the final value of the previous session. The day before, the contract rose $0.39 (0.5%) to $73.2 a barrel.
“Market participants were trying to assess what effect the collapse of Silicon Valley Bank and the merger of Credit Suisse and UBS would have on the overall market,” wrote Price Futures Group senior analyst Phil Flynn. – However, the effect could be positive, as the banking crisis could force the world’s central banks to slow the pace of rate hikes.”
The American Petroleum Institute (API) data released on Tuesday night, Wednesday, indicated a 6.08 million-barrel decline in U.S. oil inventories for the week ended March 24. Gasoline inventories fell 5.89 million barrels and distillates rose 548,000 barrels.
The official report on energy reserves in the United States will be released at 5:30 pm on Wednesday. Analysts polled by Trading Economics expect a slight increase in oil reserves by about 100,000 barrels.
Oil prices growth was also pushed up by the decision of the International Chamber of Commerce arbitration court in a lawsuit against Turkey, which challenged the export of oil from Kurdistan. The export of oil from the North of Iraq was halted on March 25. The volume of transportation through Turkey was about 400 thousand barrels of oil per day.
Oil prices of benchmark grades are declining in trading on Tuesday after reaching their highest levels in the last two weeks a day earlier.
At 8:01 a.m., May futures for Brent at ICE Futures Exchange in London stood at $77.8 per barrel, down $0.32 (0.4%) from the previous session’s close. Those contracts rose by $3.13 (4.2%) to $78.12 per barrel at Monday’s trading.
WTI futures for May at electronic trades of NYMEX decreased by $0.04, to $72.77 per barrel. Contracts rose $3.55 (5.1%) to $72.81 a barrel in the previous session.
“The crystal ball, which was clouded by the banking crisis, now shows an opportunity for profit in the oil market,” believes Manish Raj, managing director of Velandera Energy Partners. According to him, “After the disorderly sell-off in mid-March, cooler thinking has begun to prevail as traders see falling oil prices as a good entry point into the market,” MarketWatch reports.
However, analysts continue to fear the possibility of a recession in the U.S. economy, which is weighing on the market, Trading Economics reported.
Oil prices show moderate growth on Monday morning after a strong rise last week.
The value of May futures for Brent on London’s ICE Futures Exchange stood at $75.12 a barrel by 8:07 a.m., $0.13 (0.17%) above the previous session’s closing price. At the close of trading last Friday those contracts fell by $0.92 (1.2%) to $74.99 per barrel.
The price of WTI futures for May at the electronic trading on the New York Mercantile Exchange (NYMEX) is $69.4 per barrel by that time, which is $0.14 (0.2%) above the final value of the previous session. The contract fell by $0.7 per barrel to $69.26 last Friday.
Brent gained 2.8% and WTI gained 3.5% last week, slightly recovering from a collapse to multi-year lows a week earlier.
“Oil prices, largely a victim of volatility in global markets, managed to recover in the short term, although Brent is still worth 10% less than it was at the beginning of the year,” said Barbara Lambrecht, a commodities analyst at Commerzbank. – On the one hand, this is due to still high risks and on the other hand to unexpectedly high supply levels.”
Stephen Innes of SPI Asset Management pointed to good indicators on the Chinese economy and predicted that the oil market may show a small deficit by mid-year.
Meanwhile, the number of active oil rigs in the U.S. rose 4 units to 593 last week, oil services company Baker Hughes said. The week before, the figure fell to a nine-month low.
Oil prices intensified their fall on Friday afternoon amid general volatility in global financial markets.
May futures on Brent at London’s ICE Futures Exchange fell by $2.47 (3.25%) to $73.44 a barrel by 12:56 pm.
By the same time quotations of WTI futures on the electronic trading at the New York Mercantile Exchange (NYMEX) decreased by $2.46 (3.52%) – to $67.5 per barrel.
The day before Brent fell 1% and WTI – 1.3%, decreasing for the first time in four sessions on fears that the willingness of the Federal Reserve to raise interest rates further may lead to a recession in the U.S. economy.
Quotes continued to fall on Friday on a new wave of declines in European bank stocks and a stronger dollar. A strong dollar makes commodities less attractive to holders of other currencies.
Oil could end the first quarter in a record decline since early 2020 due to fears of a U.S. recession and banking sector problems while supplies remain high, Bloomberg notes.
“The banking crisis is spreading into real estate and the stock market has lost risk appetite again,” wrote Ole Sloth Hansen, head of commodity strategy at Saxo Bank. – The dollar is strengthening and U.S. and especially European stocks are actively falling, which is putting pressure on the commodities sector.”
Oil prices are declining on Thursday morning after an increase in the previous session.
Investors are assessing the actions of the Federal Reserve and data on fuel reserves in the U.S., writes Trading Economics.
Quotes for May futures on Brent at London’s ICE Futures Exchange totaled $76.08 per barrel as of 7:02 a.m., down $0.61 (0.8%) from the close of the previous session. Those contracts rose $1.37 (1.8%) to $76.69 a barrel on Wednesday.
The price of WTI futures for May oil at NYMEX fell by $0.74 (1.04%) to $70.16 per barrel on Thursday morning. The contract value grew by $1.23 (1.8%) to $70.9 a barrel at the end of previous session.
U.S. commercial oil inventories rose 1.12 million barrels to 481.18 million last week, the Energy Department’s weekly report showed. That’s the most since May 2021.
Meanwhile, gasoline reserves fell 6.4 million barrels and distillates fell 3.31 million barrels.
Analysts had expected oil reserves to fall by 5.5 million barrels, gasoline by 2 million barrels and distillates by 1.3 million barrels, according to the S&P Global Commodity survey.
The Federal Reserve raised its benchmark rate by 25 basis points at the end of Wednesday’s meeting. Its range is now 4.75-5% per year – the highest since September 2007. The decision coincided with the forecasts of most economists and analysts.
Meanwhile, Fed Chairman Jerome Powell said he did not expect any rate cuts this year. At the same time, he admitted that if inflation proves too stable, the rate could be raised more than currently expected.
Oil prices are declining after rising about 4% in the previous two sessions.
“The market has taken a breather ahead of the Fed meeting,” believes Saxo Capital Markets Pte analyst Charu Chanana. She notes, however, that oil prices continue to be supported by factors such as lower production in Russia and a projected rise in fuel demand in China, Bloomberg reported.
Deputy Prime Minister Alexander Novak said on Tuesday that Russia will extend the decision to reduce oil production by 500 thousand barrels per day until June 2023. In early February it was announced that in response to the introduction of the “ceiling” on oil prices from March its production will be reduced.
Quotes for May futures for Brent at London’s ICE Futures Exchange totaled $75 per barrel as of 7:09 a.m., down $0.32 (0.4%) from the close of the previous session. Those contracts rose $1.53 (2.1%) to $75.32 a barrel on Tuesday.
The price of WTI futures for May oil on the electronic trading on NYMEX fell by $0.33 (0.5%) to $69.34 per barrel on Wednesday morning. The contract value grew by $1.85 (2.7%) to $69.67 a barrel at the end of previous session.
The U.S. Federal Reserve’s March meeting will be held amid heightened uncertainty as banking problems added to high inflation and low unemployment, analysts said.
The consensus forecast calls for a 25-basis-point hike in the benchmark rate. Rate futures quotes suggest that traders see about an 83% chance of such a move. At the same time, many economists, including representatives of leading Wall Street banks, withdrew their forecasts for a rate hike and now believe that the Fed will take a pause and not change the cost of borrowing.
