oil prices Archives

Oil prices set for second week of gains on…

21 June 2024
by admin

Crude oil futures were little changed on Friday but on course to rise for a second week amid signs of improving demand and falling oil and fuel inventories in the US, the world’s biggest oil consumer.
Brent futures for August settlement were down 13 cents to $85.58 a barrel by 0927 GMT, while US West Texas Intermediate crude futures for August delivery were down 10 cents to $81.19.
Prices have risen about 5% this month to their highest in more than seven weeks.
“The seasonal demand increase, as shown by the latest EIA data, renewed confrontation between Israel and Hezbollah, and the hurricane season could sustain price strength into the summer,” Citi analysts said in a note.
US government data released on Thursday showed total product supplied, a proxy for the country’s oil demand, rose by 1.9 million barrels per day (bpd) in the week ending June 14 to 21.1 million bpd.
The data from the Energy Information Administration (EIA) showed a drawdown in US crude stockpiles by 2.5 million barrels rose during the week to 457.1 million barrels, compared with analysts’ expectations for a fall of 2.2 million.
Gasoline inventories fell by 2.3 million barrels to 231.2 million barrels, the EIA said, compared with forecasts for a 600,000-barrel build.
Demand prospects elsewhere also helped push prices higher.
“Signs of stronger demand in Asia also boosted sentiment. Oil refineries across the region are bringing back some idled capacity after maintenance,” analysts at ANZ Research said.
The head of Lebanon’s Hezbollah this week pledged a full-on conflict with Israel in the event of a cross-border war and also threatened EU member Cyprus for the first time.
Weighing on prices were US data released on Thursday that showed a decline in new unemployment claims, which may lead the Federal Reserve to keep interest rates unchanged. Higher interest rates typically limit economic growth and, in turn, oil demand.

Science & Environment

Oil prices rise after US crude stocks fall more…

8 May 2024
by admin

NEW YORK: Oil prices edged higher on Wednesday after US oil storage data showed a larger-than-expected draw in crude stockpiles as refiners ramped up output ahead of the summer driving season.
Brent crude oil futures increased 52 cents, or 0.63%, to $83.68 a barrel by 12:00 p.m. EDT (1600 GMT). US West Texas Intermediate crude futures rose 65 cents, or 0.83%, to $79.03 a barrel.
US crude inventories fell by 1.4 million barrels to 459.5 million barrels in the week ending May 3, according to the Energy Information Administration (EIA), rising slightly more than analysts’ expectations.
“Stronger refining activity and exports have encouraged a minor draw to crude inventories, helping unwind some of last week’s large build,” said Matt Smith, lead oil analyst at Kpler.
The EIA, however, expects slower global oil demand growth for the year, a forecast report showed.
A strengthening US dollar limited crude oil prices. A stronger greenback dampens oil demand by making it more expensive for investors holding other currencies.
Hopes of a ceasefire in Gaza have also put some downward pressure on oil prices in recent trading sessions, with some analysts saying the risk premium on oil had declined in tandem.
“Taking away the current geopolitical trigger leaves the market staring into a world of sticky inflation in the US that is countered by interest rates that not only keep the US dollar elevated but make any sort of commodity trading more expensive,” PVM Oil analyst John Evans said.
The US believes negotiations on a Gaza ceasefire should be able to close the gaps between Israel and Hamas. US Central Intelligence Agency Director Bill Burns will travel to Israel on Wednesday for talks with the Israeli Prime Minister Benjamin Netanyahu and other top officials, a source familiar with the matter told Reuters.
Morgan Stanley analysts said they see the geopolitical risk for oil prices dissipating as fears of further escalation in the conflict subside.
Cautious expectations on supply cuts from the Organization of the Petroleum Exporting Countries and its allies (OPEC+) ahead of a June 1 policy meeting also weighed on markets.
Russian Deputy Prime Minister Alexander Novak said on Tuesday that there had been no discussions about an oil output increase by OPEC+.
This came after an earlier statement in the day in which he said the group had the option of increasing production. (Reporting by Nicole Jao in New York; additional reporting by Ahmad Ghaddar in London, Trixie Yap in Singapore; editing by Jason Neely, Kirsten Donovan, Elaine Hardcastle)

Science & Environment

Sensex surges 500 points, Nifty nears 19,800 on global…

11 October 2023
by admin

Indian equity indices continued their upward trajectory for the second consecutive day, mirroring global market trends. Easing concerns about US interest rates, driven by dovish statements from key Federal Reserve officials, and stable oil prices, contributed to this positive momentum. Buying activity spanned across all sectors, according to an ET report.
The BSE Sensex surged by 500 points, reaching 66,538, while the Nifty50 traded at 19,827, marking a gain of 136 points around 10.50 am.
Among Sensex stocks, Axis Bank, ICICI Bank, L&T, Wipro, and Tata Motors all opened with gains, with Power Grid Corporation opening with losses.
Bank of Baroda shares, however, faced a nearly 4% decline after the Reserve Bank of India (RBI) prohibited the bank from adding customers to its mobile app.
In terms of sectors, Nifty Auto registered a 0.7% increase, and Nifty Media saw a 0.9% surge. Banks, financial institutions, IT, FMCG, metal, and pharma sectors all experienced gains. In the broader market, Nifty Midcap100 showed a gain of 0.93%, while Smallcap100 recorded an increase of over 1%.
Experts’ Insights
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, emphasized the resilience of global markets amid the West Asian crisis. According to him, the key factors supporting the markets include the strength of the US economy, declining US bond yields, and the hope that the Israel-Hamas conflict will remain localized, thereby not affecting crude oil prices. Vijayakumar advised investors to remain cautious, considering the potential for the situation to worsen.
Deepak Jasani, Head of Retail Research at HDFC Securities, indicated that Nifty may progress towards 19,766 and later 19,878, with 19,589 serving as near-term support.

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Global Market Trends
Asian markets extended their rally, driven by the belief that the Federal Reserve has concluded its interest rate hike cycle. Additionally, reports of potential economic stimulus in China added to the optimism. Tokyo, Sydney, Seoul, Taipei, Manila, and Jakarta saw gains in early Asian trade.
On Wall Street, indices closed higher, marking their third consecutive day of gains. Dovish comments from US Federal Reserve officials contributed to lower Treasury yields, while market observers vigilantly monitored developments in the Middle East. The Dow Jones Industrial Average increased by 0.4%, the S&P 500 rose by 0.52%, and the Nasdaq Composite surged by 0.58%.
Q2 Earnings and Investment Trends
Investors awaited the September quarter earnings of Tata Consultancy Services, a leading IT company, and Delta Corp. Other IT service providers, including HCL Tech and Infosys, are set to release their results on Thursday.
Foreign institutional investors (FIIs) continued their selling streak for the 15th consecutive session on Tuesday, selling Indian shares worth a net of Rs 1,005 crore. In contrast, domestic institutional investors (DIIs) purchased shares amounting to Rs 1,963 crore.
Oil and Currency Market
Oil prices saw a slight increase as concerns about supply disruptions due to Middle East turmoil persisted. Brent crude rose by 26 cents (0.3%) to reach $87.91 a barrel, while US West Texas Intermediate (WTI) crude increased by 17 cents (0.2%) to $86.14 a barrel.
The Indian rupee rose by 3 paise to reach $83.22 against the US dollar in early trade. The dollar index, measuring the greenback against a basket of major world currencies, declined by 0.04% to 105.78.

Science & Environment

What OPEC’s surprise oil cut means for gas prices…

4 April 2023
by admin

New York
CNN
—

OPEC and its allies’ surprise move to slash oil production will soon be felt at US gas pumps.

The group known as OPEC+ announced Sunday it would cut oil production by more than 1.6 million barrels a day starting in May, running through the end of the year. The news sent both Brent crude futures, the global oil benchmark, and WTI, the US benchmark, up about 6% in trading Monday.

The production cut announcement also had an immediate impact on gasoline futures, which will be passed onto US drivers much more quickly than the spike in oil prices. RBOB, the most closely watched wholesale gasoline price, was up about 8 cents a gallon, or about 3%, in morning trading.

“I think OPEC is reawakening the inflation monster,” said Tom Kloza, global head of energy analysis for OPIS, which tracks gas prices for AAA. “The White House has to be shocked and major-time pissed. It certainly alters the calculus for a while.”

The national average for US gas prices stood at $3.51, on Monday, according to AAA. Kloza said he could see it getting up to $3.80 to $3.90 in relatively short order thanks to the move by OPEC.

“We’re not going to get back to $5 a gallon. I don’t think we’re even going as high as $4,” he said. But he said by the end of the summer US drivers could be back above year-earlier prices, especially if there is a hurricane or other storms affecting production along the Gulf Coast.

The average US regular gas price a year ago stood at $4.19 a gallon in the wake of Russia’s invasion of Ukraine and the disruption that caused to world’s energy markets. Prices eventually reached a record $5.02 a gallon on June 14, before starting a slow but steady decline over the course of more than three months during which the average price fell every day. The decline was partly driven by the release of oil from the US Strategic Petroleum Reserve, and partly by concerns that there could be a US or global recession that reduced the demand for gasoline.

Even at $3.51, US gas prices were just below the $3.53 average on Feb. 23, 2022, the day before Russia’s invasion of Ukraine.

Kloza said one thing keeping prices from getting anywhere near the record levels of 2022 is that the US plans additional releases from the SPR, and US oil production and refining capacity are both up. But a cut of 1 million barrels a day of oil by OPEC+ will not be easy to make up.

“They have ability to cut production and they seem motivated to do so,” he said.

Tag: <span>oil prices</span>

Oil prices set for second week of gains on…

Oil prices rise after US crude stocks fall more…

Sensex surges 500 points, Nifty nears 19,800 on global…

What OPEC’s surprise oil cut means for gas prices…