Tag Archive for: oilprices

Oil futures rose on Friday, with U.S. crude up 6% for the week, as traders watched escalating Ukraine-Russia tensions.

US oil prices score a more than 6% weekly gain on supply risks tied to the Russia-Ukraine war

Oil futures settled higher on Friday, with the U.S. crude benchmark up by more than 6% for the week as traders continued to monitor escalating tensions between Ukraine and Russia, which is among the world’s biggest oil producers. Let’s talk more about oil prices score.

Still, downbeat economic data from Europe fed concerns over a potential slowdown in energy demand, as European business activity sank to a 10-month low, helping to limit gains for oil and keep WTI and Brent prices down year to date.

Oil prices score

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Source: Market Watch

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Oil prices broadly stable

Oil prices broadly stable with uncertainty around Middle East and US election

On Thursday, oil prices broadly stable amid ongoing uncertainties related to conflicts in the Middle East and reports indicating that North Korean troops may be poised to assist Russia in Ukraine, keeping traders cautious as the U.S. presidential election approaches.

By 1318 GMT, Brent crude futures had increased by 46 cents, or 0.6%, reaching $75.42 per barrel, while U.S. West Texas Intermediate crude futures rose by 39 cents, also a 0.6% gain, to settle at $71.16.

This week, oil prices have risen approximately 3% following a decline of over 7% the previous week, attributed to a perceived de-escalation of tensions in the Middle East, alongside concerns regarding oversupply and sluggish demand.

Tamas Varga, an analyst at oil brokerage PVM, noted, “The interplay of economic uncertainty, a loose oil supply landscape, and potential disruptions related to conflict will likely prevent a definitive trend in oil prices in the near term, with medium-term risks leaning towards a downward trajectory.”

On Wednesday, the U.S. government reported evidence suggesting that North Korea has dispatched 3,000 troops to Russia, potentially for deployment in Ukraine, a development that could significantly intensify Russia’s conflict with Ukraine.

Intensifying Hostilities

In the Middle East, intensified hostilities between Israel and Hezbollah raised concerns regarding supply disruptions, while airstrikes carried out by Israel reportedly targeted the Syrian capital, Damascus, early Thursday.

Simultaneously, Washington is actively advocating for a resolution between Israel and Iranian-backed factions, including Hezbollah and Hamas, ahead of the U.S. presidential election on November 5, an event that could influence American foreign policy in the region as well as oil market dynamics.

Kelvin Wong, a senior market analyst at OANDA, observed, “Current betting market data indicates that Trump is leading over Kamala Harris, with Trump suggesting the U.S. could become a significant oil supplier. Such a policy shift could exert downward pressure on prices.” While betting markets favor Trump, alternative polling indicates that the election results remain highly competitive and uncertain.

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Source: Oil & Gas 360

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Fossil fuels

Fossil fuels could become cheaper and more abundant, says IEA

Fossil fuels could soon become significantly cheaper and more abundant as governments accelerate the transition to clean energy towards the end of the decade, according to the International Energy Agency.

The world’s energy watchdog has signalled a new energy era in which countries have access to more oil, gas and coal than needed to fuel their economic growth, leading to lower prices for households and businesses.

The Paris-based agency’s influential annual outlook report found that energy consumers could expect some “breathing space” from recent spikes in global oil and gas prices triggered by geopolitical upheavals because investment in new fossil fuel projects has outpaced the world’s demand.

Fatih Birol, the executive director of the IEA, said the report confirms its prediction that the world’s fossil fuel consumption will peak before 2030 and fall into permanent decline as climate policies take effect. But continuing investment in fossil fuel projects will spell falling market prices for oil and gas, the IEA added.

“I can’t say whether or not we will see [oil prices of] $100 a barrel again, but what I can say is that despite the ongoing conflict in the Middle East we are still seeing oil prices in the $70s,” he said.

Oil prices dipped below $74 on Tuesday amid growing concern about weak Chinese demand.

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Source: The Guardian

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Rising oil prices

Rising oil prices after Iran strike could increase US gas prices, experts say

Rising oil prices climbed more than 3% on Tuesday in the immediate aftermath of an Iranian missile attack on Israel. The spike in prices is expected to push up the price of U.S. gasoline, experts told ABC News.

Drivers could face a price increase of between 10 and 15 cents per gallon, experts estimated. The national average price of a gallon of gas currently stands at $3.20, AAA data showed.

A further escalation of the conflict between Israel and Iran could send oil and gas prices significantly higher, said Ramanan Krishnamoorti, a professor of petroleum engineering at the University of Houston.

“Clearly this will have a huge impact on gas prices,” Krishnamoorti told ABC News. “There’s no doubt about that.”

Iran said the attack on Tuesday was retaliation for a wave of assassinations carried out by Israel over the last several weeks targeting Hezbollah leaders. Israel will have a “significant response” to Iran’s attack, an Israeli official told ABC News.

While sanctions have constrained Iranian oil output in recent years, the nation asserts control over the passage of tankers through the Strait of Hormuz, a trading route that facilitates the transport of about 15% of global oil supply.

Important shipping route

Passage through the Suez Canal, another important shipping route for crude oil, could be impacted by further attacks. This is what happened with Yemen-based Houthi attacks on freight ships earlier in the war, Krishnamoorti said.

Despite a recent uptick, the price of oil stands well below a 2022 peak reached when the blazing-hot economic rebound from the pandemic collided with a supply shortage imposed by the Russia-Ukraine war. Gas prices, meanwhile, have plummeted in recent months.

The U.S. set a record for crude oil production in 2023, averaging 12.9 million barrels per day, according to the U.S. Energy Information Administration, a federal agency.

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Source: ABC News

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The US will continue buying crude at $70s per barrel or lower and plans to add millions of barrels to the SPR early next year.

SPR – US set to slowly refill SPR as crude buys extend into 2025

The United States will continue to buy crude when prices are in the $70s a barrel or lower and plans to add several million barrels of crude to the Strategic Petroleum Reserve (SPR) early next year.

The U.S. Department of Energy (DOE) is continuing its efforts to bolster the depleted SPR with new oil purchases. DOE’s Office of Petroleum Reserves has recently announced a call for bids to supply up to 1.5 million barrels of oil to the Bayou Choctaw site in January 2025. An additional solicitation will follow on August 12, 2024, for another 2 million barrels destined for the Bryan Mound site, also for delivery in January 2025.

This move is part of a strategic plan to replenish the SPR while taking advantage of favorable oil prices.

The DOE’s stated goal is to buy crude oil at or below $79 per barrel.

The replenishment strategy comes in the wake of the SPR’s critical role in stabilizing the market during global supply disruptions, notably the release of more than 180 million barrels of oil from the SPR starting in 2021, as gasoline prices remained high. The Department of Treasury claims that these releases, along with coordinated international efforts, helped reduce gasoline prices by up to 40 cents per gallon in 2022.

The SPR currently houses 375 million barrels of crude—a figure that is 263 million barrels less than oil in the SPR at the beginning of President Joe Biden’s term in office. The SPR, capable of storing as many as 714 million barrels of crude oil, is kept in underground salt caverns at four sites in Texas and Louisiana and was designed to protect the economy and American livelihoods during oil shortages.

In June, U.S. Secretary of Energy Jennifer Granholm told Reuters in an interview that the Administration could accelerate the pace of buying crude to refill the SPR, as all four sites would be available by the end of the year after a maintenance period.

“All four sites will be back up by the end of the year, so one could imagine that pace would pick up, depending on the market,” Secretary Granholm said, commenting on the current pace of buying about 3 million barrels of crude for the reserve per month this year.

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Source: Oil Price

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Oil Prices Rise Amid Growing Fears of a War in the Middle East

Oil Prices Rise Amid Growing Fears of a War in the Middle East

Crude oil prices saw an upward trend today, building on a significant rise the previous day following reports of Israel’s targeted killings of Hamas political leader Ismail Haniyeh in Iran and a high-ranking Hezbollah official in Lebanon.

The assassination of Haniyeh in Iran particularly heightened market concerns, prompting Tehran to issue threats of retaliation that analysts suggest could push Brent crude prices into triple-digit levels.

“We are concerned that the region may be teetering on the edge of full-scale war,” remarked Japan’s deputy representative to the United Nations, as the Security Council urged member states to intensify diplomatic efforts to resolve the escalating conflict between Israel and its neighboring countries.

China’s UN ambassador emphasized the need for influential nations to exert greater pressure and act decisively to quell the ongoing violence in Gaza.

Iran’s representative condemned the assassination of Haniyeh as an act of terrorism, as reported by Reuters amid the unfolding situation.

The Tensions in the Middle East Due to Oil Prices Rise

With tensions in the Middle East remaining elevated, Brent crude prices exceeded $81 per barrel before slightly retracting earlier today, while West Texas Intermediate approached $79 per barrel.

In further positive news for the oil market, the Energy Information Administration (EIA) disclosed that U.S. oil demand reached a seasonal high of 20.80 million barrels per day in May, a noteworthy upward revision from earlier estimates of 20 million barrels per day.

Moreover, global oil inventories are currently in decline, reflecting a significant deficit compared to historical averages, according to Eric Nuttall, senior portfolio manager at Ninepoint Partners, who spoke to Bloomberg this week. Nuttall also highlighted improvements in OPEC+ production cut compliance as a contributing factor to the optimistic outlook for oil prices.

Should diplomatic efforts fail to alleviate tensions in the Middle East, oil prices may continue to rise, driven by fundamental market dynamics and geopolitical risk factors.

Source: Oil Price

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Oil prices rise

Oil prices rise as inflation eases, bolstering market hopes for Fed rate cut later this year

KEY POINTS ON OIL PRICES RISE:
-Crude oil futures climbed on Thursday, getting a lift from cooling inflation data.
-The consumer price index fell 0.1% in June from the prior month, bringing the 12-month rate to 3%.
-The inflation data bolstered hopes for interest rate cuts from the Federal Reserve in September. Lower rates stimulate economic growth, which can boost demand for oil.

Crude oil futures rose Thursday as inflation eased. It is bolstering hopes that the Federal Reserve will cut interest rates later this year.

Inflation as measured by the consumer price index dropped 0.1% from May to June. It is putting the 12-month rate at 3%, near the lowest level in more than three years, according to the U.S. Department of Labor.

The market is expecting the Federal Reserve to start cutting interest rates in September. Lower interest rates typically stimulate economic growth, which can bolster crude oil demand.

The inflation and interest rate outlook overshadowed mixed signals on oil demand for this year. The Paris-based International Energy Agency said global demand growth eased to 710,000 barrels per day year on year in the second quarter, the slowest increase since the fourth quarter of 2022, as consumption in China contracted.

The IEA is forecasting global oil demand growth will average just under one million barrels per day in 2024 due to subpar economic growth, greater energy efficiency and electric vehicle adoption.

OPEC, on the other hand, is much more bullish, forecasting demand growth of 2.2 million barrels per day as the cartel sees solid economic growth of 2.9% this year.

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Source: CNBC – Trusted Resource

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supply concerns

Supply concerns and demand optimism are boosting oil prices

Oil prices surged this week as hurricane season began, demand improved, and both U.S. crude and gasoline inventories fell. This triggers supply concerns. Rising geopolitical risk around the world only added to bullish sentiment.

Friday, June 21, 2024

The onset of hurricane season in the US is improving demand figures. It is corroborated by shrinking crude and product inventories. It is becoming more visible Chinese buying have come together to lift oil prices to their highest since early May. The market was also reminded of the dysfunctional Red Sea navigation with the Houthis sinking another bulker this week, adding upward pressure to oil prices.

Chevron-Hess Merger Stalled by Arbitrage Delays.

Three months have passed since the case for a contract arbitration panel on Chevron’s planned takeover of Hess’ Guyana assets was filed. Still, there is no final arbitrator selected, delaying the $53 billion merger.

Alberto Becomes the New Scare for the Gulf. 

A storm system has made landfall in Mexico’s northeast regions. It is becoming the first named tropical storm of the 2024 Atlantic hurricane season, with Tropical Storm Alberto bringing heavy rains that disrupted lightering operations in Corpus Christi and Beaumont.

Here Comes the New PE-Backed Gas Giant.

US private equity giant Carlyle Group (NASDAQ:CG) will form a new Mediterranean-focused oil and gas company after purchasing Energean’s (LON:ENOG) assets in Italy, Croatia, and Egypt for $945 million, naming former BP boss Tony Hayward as its new CEO.

Europe Approves 14th Russia Sanctions Package.

The European Union approved a 14th package of sanctions against Russia that bans re-exports of Russian LNG in the EU, however steering clear of banning LNG imports per se, whilst also blocking any financing for Russia’s planned Arctic and Baltic LNG terminals.

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Source: Oil Price

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Oil prices found support after U.S. commercial crude stockpiles declined by 1.4 million barrels in the first week of May.

US crude oil recovers losses after surprise stockpile decline

Crude oil futures rose Wednesday, recovering losses from earlier in the session as U.S. crude inventories fell.

Oil prices found support after U.S. commercial crude stockpiles declined by 1.4 million barrels in the first week of May, according to official data from the Energy Information Administration. The decline was a surprise compared to industry data that indicated a 509,000 barrel buildup.

Prices have come under pressure as of late on rising inventories with U.S. stockpiles surging in the last week of April.

“Oil market indicators have turned softer in recent weeks, and prices have declined from recent peaks,” Morgan Stanley analysts said in a research note. “The oil market is not tight now, but we see seasonal strength ahead in coming months.”

Here are Wednesday’s closing energy prices:

  • West Texas Intermediate – June contract: $78.99 a barrel, up 61 cents, or 0.78%. Year to date, U.S. crude oil has risen 10%.
  • Brent July contract: $83.58 a barrel, up 42 cents, or 0.51%. Year to date, the global benchmark has risen 8.5%.
  • RBOB Gasoline – June contract: $2.53 per gallon, down 0.46%. Year to date, gasoline futures are up about 20%.
  • Natural Gas-  June contract: $2.19 per thousand cubic feet, down 0.91%. Year to date, gas is down 13%.

Oil prices have fallen more than 7% since reaching their April highs when traders bid up prices on fears that Iran and Israel would go to war. Investors have largely sold off the war premium since then, with Morgan Stanley removing $4 per barrel of risk from its oil price forecast for the year.

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Source: CNBC

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Oil prices have bounced back after the last OPEC+ announcement sent them crashing, and the US Federal Reserve could send them higher still with optimistic messaging.

Oil Prices Climb as Sentiment Continues to Improve

Oil markets were eagerly anticipating the start of peak driving season in the summer. On the other hand, gasoline demand so far has been mostly disappointing. This is with US consumption some 2% lower year-over-year. So will oil prices climb continue?

– Asia has been the first continent where gasoline weakness led to refinery run cuts. This is a glut of light distillate supply has pushed Singapore gasoline cracks below the $5 per barrel mark.

– US gasoline cracks are notably higher than elsewhere. Currently, it is around $22 per barrel. The high US refinery utilization rates create a lot of downside for gasoline, especially as gasoline stocks are the highest since 2021 for this time of the year.

– The pressure on gasoline might increase further down the line as this year’s two main refinery newbuilds, Nigeria’s Dangote and Mexico’s Olmeca, are both delayed and will not start up in time for the summer season.

Market Movers Due to Oil Prices Climb

– US refiner Phillips 66 (NYSE:PSX) agreed to sell its 25% stake in the Rockies Express Pipeline for some $1.28 billion including debt to privately owned Tallgrass Energy which owns the remaining 75% stake.

– Commodity trading giant Trafigura has agreed to pay a $55 million fine to settle charges of fraud and manipulation from the US Commodity Futures Trading Commission, having traded misappropriated Mexican gasoline.

– French oil major TotalEnergies (NYSE:TTE) sold its Brunei upstream business to Malaysian exploration firm Hibiscus Petroleum for $260 million, using those funds for further Namibia drilling.

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Source: Oil Price

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