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.”
Oil prices began to rise moderately during trading on Thursday, recovering from the decline over the previous three sessions.
December futures for Brent on London’s ICE Futures exchange increased by $0.38 (0.41%) to $92.83 per barrel by 15:06 CST.
Quotes of futures for WTI for November in electronic trading on the New York Mercantile Exchange (NYMEX) by the specified time increased by $0.28 (0.32%) – up to $87.55 per barrel.
On Wednesday, Brent shed 2%, WTI – 2.3%, both brands finished in the red for the third session in a row.
Traders’ attention on Thursday is focused on the US Department of Energy’s report on energy stocks in the country over the past week, which will be published at 18:00 Moscow time on Thursday.
Experts polled by S&P Global Commodity Insights predict a weekly increase in US oil inventories by 2.2 million barrels, as well as a decrease in gasoline and distillate reserves by 2.1 million and 2.3 million barrels, respectively.
Data from the American Petroleum Institute (API), released yesterday, showed an increase in US oil inventories for the week ended October 7 by 7.1 million barrels after a decrease of 1.77 million barrels a week earlier.
Meanwhile, the International Energy Agency (IEA) on Wednesday lowered its 2022 oil demand growth forecast by 100,000 b/d to 99.6 million b/d. Thus, in 2022, the IEA expects global oil demand to grow by 1.9 million b/d against 2 million b/d a month earlier. The estimate of global oil demand in 2023 has been reduced from 101.8 million b/d to 101.3 million b/d.
The agency notes that the estimate of global demand has been adjusted due to the deterioration of the global economy, as well as rising fuel prices due to the adopted OPEC + plan to reduce production.
“Sustainable growth prospects are rapidly fading away amid persistent inflationary pressures, quantitative tightening, regular increases in borrowing costs, a strong dollar and coronavirus-related restrictions in China, the world’s second-largest economy,” said PVM analyst Tamas Varga.
Ankara intends to produce oil and gas in the waters of Libya within the framework of the energy agreement concluded by Turkey with this country, Turkish President Recep Tayyip Erdogan said.
“After the agreement on hydrocarbons signed by us with Libya, we will cooperate in a new area – in the extraction of oil and other resources from the Libyan continental shelf,” Bloomberg quotes him as saying.
Erdogan also announced plans to double the capacity of the Trans-Anatolian gas pipeline (TANAP), which runs from Azerbaijan through Georgia and Turkey to Greece.
Bloomberg recalls that Ankara and the administration of Abdel Hamid al-Dbeiba concluded this agreement last week: he was supposed to leave the post of prime minister after December 25, 2021, but did not do this, citing the disruption of the presidential elections in Libya. As a result, the Prime Minister of another Libyan government, Fathi Bashaga, rejected this agreement, emphasizing that al-Dbeiba does not have the authority to conclude agreements with foreign states.
At the same time, the current agreements are based on the 2019 agreement that Ankara concluded with the previous internationally recognized government of Libya, and to which Turkey provided military assistance in the confrontation with the forces of Marshal Khalifa Haftar.
In turn, the EU said that the new agreement does not comply with the UN Convention on the Law of the Sea and violates the interests of third parties. Also, Greece, Cyprus and Egypt regard the agreement as an attempt by Turkey to dominate the waters of the region.
In Libya, for a long time, there were two bodies of executive power in parallel: the Government of National Accord in Tripoli, in the west of the country, and an interim cabinet in the east of the country, supported by the army of Marshal Khalifa Haftar. According to Western media, Haftar’s forces were supported by Russia, France, Saudi Arabia, the United Arab Emirates, Egypt, Greece and Cyprus. On the side of the government in Tripoli, in turn, were Turkey, Qatar and Italy.
In October 2021, in Geneva, representatives of the warring parties signed an agreement on a permanent ceasefire. The presidential elections in Libya, the first after the overthrow and assassination of Muammar Gaddafi, were scheduled for December 24, 2021, but in the end the vote did not take place. This was due to controversy surrounding the electoral law.
GAS, OIL, PRODUCTION, TURKEY
