Oil prices fall on Monday, despite rising energy demand in China.
The pressure on the market continues to be exerted by the strengthening of the dollar, as well as fears of a recession in the global economy as a result of the rapid tightening of monetary policy by world central banks, Bloomberg notes.
“The high volatility of the oil market will continue as we see both the risks of a recession and the possibility of a supply shortage,” said Zhaojin Futures Co. analyst. Gao Jian.
The cost of December futures for Brent on the London ICE Futures exchange by 8:15 Moscow time on Monday is $92.87 per barrel, which is $0.63 (0.67%) lower than the closing price of the previous session. As a result of trading on Friday, these contracts rose by $1.12 (1.2%) to $93.5 per barrel.
The price of futures for WTI oil for December in electronic trading on the New York Mercantile Exchange (NYMEX) fell by $0.6 (0.71%) by this time, to $84.45 per barrel. By the close of previous trading, the value of these contracts increased by $0.54 (0.6%) to $85.05 per barrel.
As a result of last week, Brent rose by 2%, WTI – by 0.5%.
Statistical data on the Chinese economy, published on Monday, showed a more significant than expected growth in the country’s GDP in the third quarter. The indicator increased by 3.9% in annual terms after rising by 0.4% in the previous quarter. The consensus forecast of experts polled by Trading Economics called for growth of 3.4%.
The growth rate of Chinese exports in September slowed down to 5.7% from 7.1% in August, while imports grew by 0.3%, the same as a month earlier.
At the same time, China’s oil imports increased to 9.83 million barrels per day, the highest since May, according to Bloomberg calculations based on data from the General Administration of Customs of the People’s Republic of China.
Oil prices are rising on Friday morning due to rumors about a possible easing of anti-COVID restrictions in China.
The price of December futures for Brent on the London ICE Futures exchange by 8:13 am CST is $92.90 per barrel, which is $0.42 (0.45%) higher than the closing price of the previous session. As a result of trading on Thursday, these contracts fell by 3 cents to $92.38 per barrel.
The price of futures for WTI oil for December in electronic trading on the New York Mercantile Exchange (NYMEX) is $84.98 per barrel by this time, which is $0.47 (0.56%) higher than the final value of the previous session. By the close of the last session, the contract fell 1 cent to $84.51 per barrel.
A positive factor for the oil market was the news about a possible easing of quarantine regulations for tourists in China. The quarantine period could be reduced to 7 days from the current 10, Bloomberg wrote.
Rumors of an easing of restrictive measures in China were perceived by investors as a signal of a potential curtailment of the policy of “zero tolerance” for the coronavirus, which in turn could spur economic growth and increase demand for fuel in the country, writes The Wall Street Journal.
“China was expected to increase oil imports, but there is no increase in spot market activity from the world’s second largest economy,” said StoneX Group analyst Harry Altham. “Such measures could revive the economy, suffering from anti-COVID restrictions, and become a lifeline for struggling air carriers.
Earlier, US President Joe Biden decided to release 15 million barrels from the strategic reserve (SPR) in December.
“Given that this is part of a previously announced large-scale release, the impact on the market is minimal. Such a measure is unlikely to offset the effect of OPEC+ supply cuts,” ING analyst Warren Patterson wrote.
Oil prices are rising after falling to lows in more than two weeks on reports that the US plans to sell additional barrels of oil from the strategic reserve.
The price of December futures for Brent on the London ICE Futures exchange by 8:10 am Wednesday is $90.52 per barrel, which is $0.49 (0.54%) higher than the closing price of the previous session. As a result of trading on Tuesday, these contracts fell by $1.59 (1.7%) to $90.03 per barrel.
The price of futures for WTI oil for November in electronic trading on the New York Mercantile Exchange (NYMEX) rose by this time by $0.88 (1.06%), to $83.7 per barrel. By the close of previous trading, the value of these contracts fell by $2.64 (3.1%) to $82.82 per barrel.
US President Joe Biden will announce on Wednesday the sale of an additional 15 million barrels of oil from the country’s strategic oil reserve in response to OPEC+’s move to cut oil production by 2 million b/d since November, the Associated Press wrote, citing senior officials in the US presidential administration. .
In addition, the President is expected to announce that he may make a similar decision several times this winter. These measures are aimed at curbing the rise in oil prices in the world. The plan to sell the energy resource from the reserve was announced in March, and it was designed for six months. In total, it was planned to release 180 million barrels.
At the moment, the US strategic oil reserve is at its lowest level since 1984, which is about 400 million barrels of oil, writes Associated Press.
At the same time, upside potential in the oil market remains due to traders’ concerns about supply. “We continue to see a number of opportunities for a short-term recovery (of oil prices – IF), as the EU embargo on energy supplies from the Russian Federation comes into force in December, and the G7 countries continue to work on the price ceiling for Russian oil,” analysts at Fitch Solutions said.
Oil prices are slightly reduced during trading on Tuesday, investors assess the risks of a global recession and monitor the dollar.
December futures for Brent on London’s ICE Futures exchange fell by $0.02 (0.02%) to $91.6 per barrel by 14:06 CST.
Quotes of WTI futures for November in electronic trading on the New York Mercantile Exchange (NYMEX) by the specified time decreased by $0.09 (0.11%) to $85.37 per barrel.
Bidding on the eve of both brands completed without significant changes.
Strong growth in US stocks and a weakened dollar on Monday failed to provoke an increase in oil prices, said Warren Patterson, head of commodity strategy at ING.
“Instead, the market appears to be wary of a decline in demand. Chinese President Xi Jinping has made it clear that China will continue to pursue a ‘zero tolerance’ policy for the coronavirus, which increases uncertainty about China’s oil demand until the end of 2023,” he wrote. Patterson.
During the morning session on Tuesday, oil rose in price moderately, but then turned to decline due to the renewed strengthening of the dollar – an index that tracks the dynamics of the US dollar against six major world currencies, by 14:06 CSK rises by about 0.3%.
Also, downward pressure on oil prices is exerted by concerns about the tightening of the monetary policy of many major central banks of the world, aimed at curbing inflation, writes Trading Economics.
Oil prices are rising during trading on Tuesday after a moderate decline in the previous session.
The cost of December futures for Brent crude on the London ICE Futures exchange by 8:06 am CST on Tuesday is $92.37 per barrel, which is $0.75 (0.82%) higher than the closing price of the previous session. As a result of trading on Monday, these contracts fell by $0.01 (0.01%) to $91.62 per barrel.
The price of futures for WTI oil for November in electronic trading on the New York Mercantile Exchange (NYMEX) rose by this time by $0.82 (0.96%), to $86.28 per barrel. By the close of previous trading, the value of these contracts fell by $0.15 (0.2%) to $85.46 per barrel.
The market is supported, among other things, by the weakening of the dollar, which is depreciating against major currencies on Tuesday amid increased risk appetite, writes CNBC. Meanwhile, concerns about a potential recession in the global economy limit the growth of oil prices.
Downward pressure on oil prices continues to be exerted by concerns about the tightening of the monetary policy of many major central banks of the world, aimed at curbing inflation, writes Trading Economics.
Meanwhile, China is expected to maintain loose monetary policy to support the economy amid COVID-19-related restrictions.
Market participants are preparing to cut OPEC+ oil production. As reported, in early October, OPEC + decided to reduce oil production quotas from November by 2 million barrels per day.
Oil prices rise on Monday after a significant fall on Friday and following the results of the entire past week.
Market fears associated with a possible decrease in demand for energy resources in the world remain, and this factor is likely to continue to put pressure on the oil market, Bloomberg notes.
Chinese President Xi Jinping, speaking at the 20th Congress of the Chinese Communist Party (CCP), which opened on Sunday, signaled that the country’s authorities would continue their tough policy to contain the spread of COVID-19, which has already seriously weakened the country’s economy this year.
The cost of December futures for Brent crude on the London ICE Futures exchange by 8:10 pm on Monday is $92.31 per barrel, which is $0.68 (0.74%) higher than the closing price of the previous session. As a result of trading on Friday, these contracts fell by $2.94 (3.1%) to $91.63 per barrel.
The price of futures for WTI oil for November in electronic trading on the New York Mercantile Exchange (NYMEX) rose by this time by $0.62 (0.72%), to $86.23 per barrel. By the close of previous trading, the value of these contracts fell by $3.5 (3.9%) to $85.61 per barrel.
As a result of last week, Brent fell by 6.4%, WTI – by 7.6%.
“The momentum we see today is likely to be short-lived as there is no clear reason for a rally,” said Vanda Insights founder Vandana Hari. “Investors may now be seeing profitable opportunities in the market after last week’s sharp drop.”
