Benchmark oil prices are moderately rising on Tuesday morning after a marked decline a day earlier.
The price of March futures for Brent on the London ICE Futures exchange by 7:14 a.m. was $82.64 per barrel, which is $0.24 (0.29%) higher than at the close of the previous session. On Monday, these contracts fell by $1.15 (1.4%) to $82.4 per barrel.
Quotations for March futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) by this time increased by $0.28 (0.36%) to $77.06 per barrel. At the end of the previous session, they fell by $1.23 (1.6%) to $76.78 per barrel.
At the beginning of the last session, oil was actively rising in price on the news of the deaths of three American soldiers as a result of a drone attack on a US base in Jordan. U.S. President Joe Biden claimed that paramilitary groups linked to Iran were involved in the attack. Tehran denied such accusations.
Some market participants fear a direct military clash between the United States and Iran, but Washington may try to “contain the escalation and give a limited, local response amid the electoral cycle,” said XS.com analyst Samer Hasn.
At the same time, oil quotations are under pressure from fears of a slowdown in the economy of China, the world’s largest oil importer, and global demand in general, MarketWatch writes.
Benchmark oil prices are rising on Monday morning on the news of the deaths of US military personnel in Jordan as a result of drone attacks.
The price of March futures for Brent on the London ICE Futures exchange at 7:07 a.m. is $83.97 per barrel, which is $0.42 (0.5%) higher than at the close of the previous session. Last Friday, these contracts rose in price by $1.12 (1.4%) to $83.55 per barrel.
Quotations for March futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) by this time increased by $0.36 (0.46%) to $78.37 per barrel. At the end of the previous session, they rose by $0.65 (0.8%) to $78.01 per barrel.
Last week, the price of Brent rose by 6.4%, a record pace since mid-October, and WTI by 6.5%, the highest since early September.
Oil prices were supported last week by data showing a drop in US oil reserves and production last week, said Colin Czeszynski, an analyst at SIA Wealth Management. An additional positive factor was the expectation of new incentives in China.
Meanwhile, the US military reported a drone attack on an American base in northeastern Jordan near the border with Syria. Three soldiers were killed and 34 others were injured. US President Joe Biden said on Sunday that Iranian-backed militias were responsible for the attack.
Much will now depend on the US response and the actions of Iran, which could close the Strait of Hormuz, Tariq Zaheer of Tyche Capital Advisors told MarketWatch. “We are on the verge of escalation, which could seriously affect oil flows,” he added.
Data from the oilfield services company Baker Hughes showed that over the past week, the number of operating oil rigs in the United States increased by two to 499 units. Meanwhile, the number of gas rigs decreased by one to 119.
Benchmark oil prices are declining on Monday morning after production resumed at Libya’s largest field.
Quotations of March futures for Brent on the London ICE Futures exchange as of 7:11 a.m. amounted to $78.23 per barrel, which is $0.33 (0.42%) below the level at the close of the previous trading. On Friday, these contracts fell by $0.54 (0.7%) to $78.56 per barrel.
Prices for February futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) decreased by $0.25 (0.34%) to $73.16 per barrel. As a result of the previous trading, the price of these contracts fell by $0.67 (0.9%) to $73.41 per barrel. February contracts will expire at the close of the market on Monday. Futures for March, which are traded more actively, are cheaper by $0.31 (0.42%) to $72.94 per barrel.
Last week, Brent rose by 0.3%, WTI by 1%.
On Sunday, the Libyan National Oil Corporation announced the lifting of the force majeure regime and the full resumption of production at the Ash Sharara field, which has a capacity of 300 thousand barrels per day.
The force majeure regime was in effect since January 7 due to protests that led to the suspension of supplies from the field to the Zawiya export terminal.
PJSC Ukrnafta has increased its reserves by 330 thousand tons of oil and 618 million cubic meters of gas by expanding the boundaries of two existing special permits, the company’s press service reports.
According to the company, the reason for expanding the boundaries of the special permits is to bring their size to the contours of the field’s productive deposits.
The subsoil area of the first special permit now amounts to 18.33 square kilometers, which is 23.1% more than the previously granted area. Total reserves increased by 217 thousand tons of oil and condensate and 232 million cubic meters of gas.
The area of the second license increased by 16.3% to 41.75 square kilometers. Total reserves increased by 113 thousand tons of condensate and 386 million cubic meters of gas.
“By 2023, the company has expanded the boundaries of special permits only twice. I thank the company’s employees who prepared and submitted the necessary applications and packages of documents to the State Service of Geology and Subsoil of Ukraine, after which the relevant orders were received, thus increasing the opportunities for resource extraction,” said Sergiy Koretsky, CEO of Ukrnafta.
As reported, in 2023, Ukrnafta increased oil and condensate production by 3% (by 39.9 thousand tons) compared to 2022 – up to 1 million 409.9 thousand tons, gas production by 5.8% (by 60.4 million cubic meters), up to 1 billion 97.4 million cubic meters.
“Ukrnafta’s strategic goal is to double its oil and natural gas production to 3 million tons and 2 billion cubic meters by 2027, respectively.
“Ukrnafta is Ukraine’s largest oil producer and operator of a national network of 537 filling stations, of which 456 are in operation.
Ukrnafta’s largest shareholder is Naftogaz of Ukraine with a 50%+1 share. On November 5, 2022, the Supreme Commander-in-Chief of the Armed Forces of Ukraine decided to transfer the corporate rights of the company owned by private owners, which is now managed by the Ministry of Defense, to the state.
Oil prices were stable on Friday, but ended the week in the black amid geopolitical tensions and declining US oil inventories.
The cost of March futures for Brent crude oil on the London ICE Futures exchange as of 7:20 a.m. is $78.98 per barrel, which is $0.12 (0.15%) lower than at the close of the previous trading. On Thursday, these contracts rose by $1.22 (1.6%) to $79.1 per barrel.
February futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) have risen in price by this time by $0.08 (0.11%) to $74.16 per barrel. As a result of the previous trading, the value of these contracts increased by $1.52 (2.1%) to $74.08 per barrel.
Since the beginning of this week, Brent has risen in price by 0.9%, WTI – by 2%.
Commercial oil inventories in the United States last week decreased by 2.492 million barrels, to the lowest level since October, the country’s Energy Ministry said on Thursday. Stocks at the Cushing terminal, where oil traded on the Nymex is stored, decreased by 2.1 million barrels over the week, the most since September last year.
US oil production increased by 100 thousand barrels to 13.3 million barrels per day (bpd).
Gasoline reserves in the United States increased by 3.08 million barrels last week, and distillate reserves by 2.37 million barrels.
The International Energy Agency (IEA), which published its monthly oil market review the day before, expects oil demand growth in 2023 to decline to 1.2 million bpd from 2.3 million bpd in 2023.
The IEA’s forecast “is consistent with OPEC’s expectations of a steady increase in demand,” said Matthew Weller, an analyst at FOREX.com and City Index, as quoted by Market Watch.
However, “OPEC’s demand forecast for this year is significantly stronger,” the expert says.
Oil prices are falling on Wednesday amid a general decline in risk appetite and a stronger US dollar, despite the ongoing tensions in the Red Sea region.
The cost of March futures for Brent on the London ICE Futures exchange as of 7:15 a.m. is $77.66 per barrel, which is $0.63 (0.8%) lower than at the close of the previous trading. On Tuesday, these contracts rose by $0.14 (0.2%) to $78.29 per barrel.
Futures for WTI for February in electronic trading on the New York Mercantile Exchange (NYMEX) have fallen by $0.65 (0.9%) to $71.75 per barrel by this time. As a result of previous trading, the value of these contracts fell by $0.28 (0.4%) to $72.4 per barrel.
Traders seem to be “more concerned about a lack of demand than a shortage of supply at the moment,” said Colin Sizinski, portfolio manager at SIA Wealth Management, as quoted by Market Watch.
The sharp decline in the Empire State Manufacturing index in January “signals a slowdown in US growth, and the Chinese economy is a major concern,” the expert said.
China’s GDP growth in the fourth quarter of 2023 accelerated to 5.2% year-on-year from 4.9% in October-December, but was worse than market expectations (+5.3%).
On Wednesday, the dollar index DXY is adding 0.1%, having risen by 0.6% the day before.
