Oil prices are rising on Wednesday, recovering slightly after the collapse the day before.
The cost of October futures for Brent on London’s ICE Futures is $100.01 per barrel by 8:06 a.m. on Wednesday, which is $0.7 (0.7%) higher than at the close of the previous session. As a result of trading on Tuesday, these contracts fell by $5.78 (5.5%) to $99.31 per barrel.
October Brent futures expire at the close of the session on Wednesday. More actively traded November contracts added $0.94 (0.96%) in price, trading at $98.78 per barrel.
The price of futures for WTI oil for October in the electronic trading of the New York Mercantile Exchange (NYMEX) is $92.51 per barrel by this time, which is $0.87 (0.95%) higher than the final value of the previous session. By the close of the market the day before, the cost of these contracts decreased by $5.37 (5.54%) to $91.64 per barrel.
Experts from the OPEC+ technical committee have raised their estimate of the oil surplus in 2022 from 0.8 million bpd to 0.9 million bpd, according to reports prepared for the meeting of the technical committee scheduled for August 31, which Interfax has read.
Based on the reporting, experts downgraded their estimate of oil demand growth in 2022 under the baseline scenario from 3.4 million b/d to 3.1 million b/d, to 100 million b/d; growth in supply – from 5.8 million b/d to 5.6 million b/d to 100.9 million b/d.
Traders, meanwhile, are waiting for the US Department of Energy’s weekly report on commercial stocks of oil, gasoline and distillates in the country, which will be released later on Wednesday.
Experts on average expect oil inventories to fall 1.9 million barrels, gasoline more than 1.3 million barrels and distillates nearly 1.2 million barrels, according to a S&P Global Commodity Insights survey.
The focus of traders remains the situation in Libya, as well as the upcoming OPEC + meeting, which is expected to discuss the possibility of cutting production.
The cost of October futures for Brent oil on the London ICE Futures exchange by 8:15 quarter on Tuesday is $104.28 per barrel, which is $0.81 (0.77%) lower than the closing price of the previous session. As a result of trading on Monday, these contracts rose by $4.1 (4.1%) to $105.09 per barrel.
The price of futures for WTI oil for October in the electronic trading of the New York Mercantile Exchange (NYMEX) is $96.76 per barrel by this time, which is $0.25 (0.26%) lower than the final value of the previous session. By the close of the market the day before, the cost of these contracts increased by $3.95 (4.2%) to $97.01 per barrel.
Over the weekend, clashes between two armed groups took place in Tripoli, as a result of which more than 30 people were killed, Bloomberg reported. This raised fears that Libya is waiting for another full-scale conflict, as a result of which oil supplies to the world market will be reduced. State oil company National Oil Corp., however, said on Monday that the country’s oil production remains at 1.2 million bpd.
“A new wave of Libyan production cut fears, coupled with uncertainty about the upcoming OPEC+ meeting, provided support for the oil market on Monday,” said Warren Patterson, head of commodity strategist at ING Groep NV. “However, without major supply disruptions or interventions OPEC+, we can hardly expect a significant rise in prices in the short term.”
Oil prices are rising on Monday, traders are watching the situation in Libya, as well as the progress of negotiations on the Iranian nuclear deal.
Over the weekend, clashes between two armed groups took place in Tripoli, as a result of which more than 20 people were killed, Bloomberg reports. This raised fears that Libya is waiting for another full-scale conflict, as a result of which oil supplies to the world market will be reduced.
Iran, meanwhile, will continue to study US proposals for a nuclear deal until at least September 2, state news agency Nour News reported.
The cost of October futures for Brent oil on the London ICE Futures exchange by 8:15 am CST on Monday is $101.88 per barrel, which is $0.89 (0.88%) higher than the closing price of the previous session. As a result of trading on Friday, these contracts rose by $1.65 (1.7%) to $100.99 per barrel.
The price of futures for WTI oil for October in the electronic trading of the New York Mercantile Exchange (NYMEX) is $94.06 per barrel by this time, which is $1 (1.07%) higher than the final value of the previous session. By the close of the market on Friday, the value of these contracts increased by $0.54 (0.6%) to $93.06 per barrel.
As a result of the past week, Brent has risen in price by 4.4%, WTI – by 2.9%.
“Despite the hawkish stance of the world’s largest central banks, which means further hikes in interest rates and weakening economic growth, oil continues to rise in price as the balance of supply and demand speaks in favor of higher prices,” said James Whistler, managing director of Vanir Global Markets Pte in Singapore. “The possibility of OPEC production cuts remains, as Libya and Congo support the position of Saudi Arabia, while the problem of oil supplies from Kazakhstan also remains,” Bloomberg quoted the expert as saying.
In January-July 2022, Ukraine reduced the import of oil and crude oil (according to the TNVED code 2709) by 16.4% (by 101,209 thousand tons) compared to the same period last year, to 516,807 tons.
According to the State Customs Service, raw materials worth $346.377 million were imported in seven months, which is 1.7 times more than in January-July 2021 ($267.354 million), incl. from Azerbaijan – by $346.195 million, Libya – by $0.182 million. In July of this year, Ukraine did not import oil.
Ukraine in January-July 2022 did not export oil, while for the same period in 2021, 89.963 thousand tons of oil were exported from the country to Romania for $27.133 million.
As reported, in 2011 Ukraine imported 5 million 826.316 thousand tons of oil for $4 billion 384.387 million, in 2012 – 1 million 544.196 thousand tons for $1 billion 232.584 million, in 2013 – 761.058 thousand tons for $630.282 million, in 2014 – 178.613 thousand tons for $146.533 million, in 2015 – 248.158 thousand tons for $89.039 million, in 2016 – 515.954 thousand tons for $173.835 million, in 2017 – 1 million 13.359 thousand tons of oil for $442.219 million, in 2018 – 766.832 thousand. tons for $431.735 million, in 2019 – 790.628 thousand tons for $405.748 million, in 2020 – 1 million 245.587 thousand tons for $409.167 million, in 2021 – 1 million 561.247 thousand tons for $827.592 million.
Oil quotes strengthened their rise during trading on Friday and are ending the week in positive territory due to reduced fears of a recession in the US.
October futures for Brent on London’s ICE Futures exchange rose by $1.57 (1.58%) to $100.91 per barrel by 14:11 CST.
Quotes of futures for WTI for October in electronic trading on the New York Mercantile Exchange (NYMEX) by the specified time increased by $1.22 (1.32%) – up to $93.74 per barrel.
On the eve of Brent has fallen in price by 1.9%, WTI – by 2.5%, but since the beginning of the week both contracts have increased in price by more than 3%.
Markets continue to receive support from the statistical data published the day before, according to which the reduction of US GDP in the second quarter amounted to 0.6% in terms of annual rates. The preliminary estimate was worse and indicated a fall of 0.9%.
In addition, Saudi Arabia, OPEC’s largest oil producer, has previously hinted at the possibility of a cartel cut in production, which also supports prices.
“A group of producing countries is committed to maintaining a price floor around $100 a barrel, and therefore downside potential appears to be limited,” said Stephen Brennock, an analyst at PVM.
Market participants also follow the annual economic symposium in Jackson Hole. On Friday, the event will feature a speech by Federal Reserve Chairman Jerome Powell, which could cause the dollar to react, which in turn will affect commodity prices, said SIA Wealth Management senior strategist Colin Czeszynski.
A Ukrainian transport company reacted positively to the proposal of Slovnaft and MOL to pay transit fees for transporting oil through the southern branch of the Druzhba oil pipeline, the Slovak company said.
“Slovnaft has already made a payment to the company’s account. Based on this, Slovnaft expects the resumption of oil supplies in the coming days. The Russian side also agreed with this decision,” the company stressed.
According to Bloomberg, the Hungarian MOL also transferred the transit payment and expects to resume deliveries in the coming days.
Earlier, Transneft reported that on August 4, Ukrtransnafta stopped the transit of Russian oil through Ukraine due to a failure to pay the transit fee. It was noted that the funds sent on July 22 for transit in August were returned to the account of Transneft on July 28 in connection with the entry into force of EU Regulation 2022/1269. Through the southern branch of the Druzhba oil pipeline passing through the territory of Ukraine, oil supplies are carried out in the direction of the refineries of Hungary, Slovakia and the Czech Republic on the basis of a long-term agreement between PJSC Transneft and JSC Ukrtransnafta for the provision of oil transportation services on the terms of 100% prepayment.
The Hungarian MOL and the Slovak Slovnaft (also part of the MOL group) initiated discussions with the Ukrainian and Russian sides on the possibility of paying a transit fee to MOL or Slovnaft, which would allow oil supplies to be restored.
“The interruption of supplies occurred after technical problems at the bank level due to the payment of transit fees from the Russian side. However, production at the Bratislava refinery is running smoothly, and deliveries to the market are smooth. During this period, the Bratislava refinery is in close cooperation with the national oil transporter Transpetrol, as well as in cooperation with the Slovak Ministry of Economy, uses all the reserves available in the system for processing,” Slovnaft said.
So far, there have been no reports of a solution to the problem of transit to the Czech Republic.
Last year, 12 million tons of Russian oil was transported through Druzhba through Ukraine, including 3.4 million tons to the Czech Republic, 5.2 million tons to Slovakia, and 3.4 million tons to Hungary.
