Oil prices are slightly reduced in trading on Thursday after a steady rise in the previous session.
Traders are keeping an eye on the situation in China, as well as evaluating the announcement of the US Department of Energy regarding plans to replenish the Strategic Petroleum Reserve (SPR).
The authorities of Chengdu, the capital of Sichuan province, are preparing to ease quarantine restrictions in certain areas of the city, which is home to 21 million people, Bloomberg reports.
On the eve of the International Energy Agency (IEA) said that the demand for oil in China in 2022 may decline for the first time since 1990 due to tough measures taken by the authorities to curb the spread of coronavirus. According to the IEA forecast, oil demand in China will decrease by 2.7% this year.
The price of November futures for Brent oil on the London ICE Futures exchange by 8:20 q.m. on Thursday is $93.9 per barrel, which is $0.2 (0.21%) lower than the closing price of the previous session. As a result of trading on Wednesday, these contracts rose by $0.93 (1%) to $94.1 per barrel.
The price of futures for WTI oil for October in the electronic trading of the New York Mercantile Exchange (NYMEX) is $88.41 per barrel by this time, which is $0.07 (0.08%) lower than the final value of the previous session. By the close of the market the day before, the value of these contracts increased by $1.17 (1.3%) to $88.48 per barrel.
The U.S. Department of Energy said on Wednesday that it could start replenishing the Strategic Petroleum Reserve (SPR) only after fiscal year 2023, which begins on October 1. Earlier, Bloomberg reported, citing sources, that the US intends to start replenishing the SPR when oil prices fall below $80 per barrel. The Ministry of Energy noted that its plan for SPR does not provide for a trigger price that should provoke oil purchases.
Oil prices are falling on Tuesday after rising the day before. The pressure on the market is exerted by continuing fears of a decrease in demand due to strict quarantine restrictions in China. The European Union, meanwhile, is preparing a plan to reduce energy consumption in the face of falling gas supplies from Russia.
“We do not think that we can expect a sustainable rally in the market in the near future,” Morgan Stanley’s expert review, quoted by Bloomberg, says. is already reflected in market statistics, and China is a particularly important contributor.”
The cost of November futures for Brent crude on the London ICE Futures exchange by 8:10 am CST on Tuesday is $93.7 per barrel, which is $0.3 (0.32%) lower than the closing price of the previous session. As a result of trading on Monday, these contracts rose by $1.16 (1.3%) to $94 per barrel.
The price of futures for WTI oil for October in the electronic trading of the New York Mercantile Exchange (NYMEX) is $87.58 per barrel by this time, which is $0.20 (0.23%) lower than the final value of the previous session. By the close of the market the day before, the value of these contracts increased by $0.99 (1.1%) to $87.78 per barrel.
The US reaffirmed on Monday that it does not see the possibility of reaching an agreement on the restoration of the Joint Comprehensive Plan of Action soon.
US Secretary of State Anthony Blinken said that he considers the restoration of the JCPOA in the near future unlikely due to Tehran’s position. Last Saturday, Germany, France and the UK expressed “serious doubts” about Iran’s sincerity in seeking to renew the JCPOA and warned that the country’s stance jeopardized the prospects for a deal.
Oil quotes add about 2% during trading on Friday, recovering after falling the day before.
Meanwhile, prices for both brands could show their biggest weekly decline in four weeks amid fears of a recession in the global economy and the consequences of another lockdown in China, writes Trading Economics.
The price of November futures for Brent on the London ICE Futures exchange by 8:10 a.m. on Friday is $94.22 per barrel, which is $1.86 (2.01%) higher than the closing price of the previous session. As a result of trading on Thursday, these contracts fell by $3.28 (3.4%) to $92.36 per barrel.
The price of futures for WTI oil for October in the electronic trading of the New York Mercantile Exchange (NYMEX) is $88.38 per barrel by this time, which is $1.77 (2.04%) 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 $2.94 (3.3%) to $86.61 per barrel.
As reported, the finance ministers of the G7 countries at a meeting on Friday plan to approve and outline their plan to set a price limit for Russian oil.
Oil prices ended August with a decline and continued to fall on the first day of September.
At the end of last month, Brent fell by 12.3%, WTI – by 9.2%, and negative dynamics were noted for the third month in a row, which is the longest such period since the first half of 2020.
The price of November Brent futures on the London exchange ICE Futures at 8:10 Moscow time on Thursday is $95.18 per barrel, which is $0.46 (0.48) below the closing price of the previous session. According to the results of trading on Wednesday, these contracts fell in price by $2.2 (2.3%), to $95.64 per barrel.
The price of WTI oil futures for October on the electronic trading of the New York Mercantile Exchange (NYMEX) is currently $89.08 per barrel, which is $0.47 (0.52%) lower than the final value of the previous session. By the close of the market the day before, the value of these contracts decreased by $2.09 (2.3%), to $89.55 per barrel.
Pressure on the market is caused by fears of a downturn in the world economy against the background of tightening of monetary policy by the world’s largest central banks, as well as coronavirus restrictions in effect in China, according to the Bloomberg agency.
“Concerns about the state of the economy are a key reason for the decline in the oil market,” said WTRG Economics energy markets analyst James Williams, quoted by Market Watch.
“OPEC expresses concerns about demand prospects, and sometimes representatives of the cartel raise the question of reducing quotas. The possibility of a recession now occupies an important place in OPEC’s thinking,” the expert notes.
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.”
