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Tag: crude oil prices

  • Crude oil prices slide on concerns over China’s demand; Brent hits $82.74/bbl

    Crude oil prices slide on concerns over China’s demand; Brent hits $82.74/bbl

    Oil prices dropped in early trade on Tuesday, weighed down by concerns about slowing fuel demand in top crude importer China amid strict COVID-19 curbs.

    Brent crude LCOc1 futures fell 45 cents, or 0.5%, to trade at $82.74 a barrel at 0113 GMT. US West Texas Intermediate (WTI) crude CLc1 futures dropped 51 cents, or 0.7%, to $76.73 a barrel.

    Brent settled down 0.5% the previous day, having slumped more than 3% to $80.61 earlier in the session to its lowest since Jan. 4. WTI settled up 1.3% on Monday, after earlier touching its lowest since December 2021.

    “Bearish moods toward oil prices are spreading in Asia due to concerns about a decline in China’s demand while the rare protests over the weekend also raised fears over the impact on the Chinese economy,” said Toshitaka Tazawa, an analyst at Fujitomi Securities Co Ltd.

    The rare street protests that erupted in cities across China over the weekend were a vote against President Xi Jinping’s zero-COVID policy and the strongest public defiance during his political career, China analysts said. Beijing has stuck with the zero-COVID policy even as much of the world has lifted most restrictions. Read full story

    Investors also remained cautious ahead of a key meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, known as OPEC+, on Dec. 4. Analysts at Eurasia Group suggested in a note on Monday that weakened demand out of China could spur OPEC+ to cut output.

    “Losses were limited (on Tuesday) as some investors expect that OPEC and its allies may agree on a production cut in their next meeting to support oil prices,” said Fujitomi Securities analyst Tazawa.

    Markets are also assessing the impact of an upcoming Western price cap on Russian oil.

    Group of Seven (G7) and European Union diplomats have been discussing a cap of between $65 and $70 a barrel, with the aim of limiting revenue to fund Moscow’s military offensive in Ukraine without disrupting global oil markets. Russia calls its actions in Ukraine “a special operation”.

    But EU governments failed to agree on Monday on the cap, with Poland insisting the cap should be set lower than proposed by the G7, diplomats said. Read full story

    The price cap is due to come into effect on Dec. 5, when an EU ban on Russian crude also takes effect.

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  • Crude oil drops more than $1 as China’s COVID protests fuel demand worries; Brent hits $82.62/bbl

    Crude oil drops more than $1 as China’s COVID protests fuel demand worries; Brent hits $82.62/bbl

    Oil futures fell more than $1 early on Monday as protests in top importer China over strict COVID-19 curbs fuelled demand worries, while investors remained cautious ahead of an agreement on a Western price cap on Russian oil and an OPEC+ meeting.

    Brent crude LCOc1 dropped $1.01, or 1.2%, to trade at $82.62 a barrel at 0110 GMT. US West Texas Intermediate (WTI) crude CLc1 slid $1.09, or 1.4%, to $75.19.

    Both benchmarks, which hit 10-month lows last week, have posted three consecutive weekly declines. Brent ended the latest week down 4.6%, while WTI fell 4.7%.

    “On top of growing concerns about weaker fuel demand in China due to a surge in COVID-19 cases, political uncertainty, caused by rare protests over the government’s stringent COVID restrictions in Shanghai, prompted selling,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.

    WTI’s trading range is expected to fall to $70-$75, he said, adding the market could stay volatile depending on the outcome of the OPEC+ meeting and the price cap on Russian oil.

    China, the world’s top oil importer, has stuck with President Xi Jinping’s zero-COVID policy even as much of the world has lifted most restrictions.

    Hundreds of demonstrators and police clashed in Shanghai on Sunday night as protests over China’s strict COVID restrictions flared for the third day and spread to several cities in the wake of a deadly fire in the country’s far west.

    The wave of civil disobedience is unprecedented in mainland China since Xi assumed power a decade ago, as frustration mounts over his zero-COVID policy nearly three years into the pandemic.

    Meanwhile, Group of Seven(G7) and European Union diplomats have been discussing a price cap on Russian oil of between $65 and $70 a barrel, with the aim of limiting revenue to fund Moscow’s military offensive in Ukraine without disrupting global oil markets.

    But a meeting of EU government representatives, scheduled for Nov. 25 evening to discuss the issue, was canceled, EU diplomats said. The price cap is due to come into effect on Dec. 5 when an EU ban on Russian crude kicks off. 

    Investors are also focusing on the next meeting of the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, on Dec. 4.

    In October, OPEC+ agreed to reduce its output target by 2 million barrels per day through 2023.

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  • Crude oil prices slip on OPEC cut in demand forecast, Brent hits $92.75/bbl

    Crude oil prices slip on OPEC cut in demand forecast, Brent hits $92.75/bbl

    Oil prices extended losses in early Asian trade on Tuesday after OPEC cut its 2022 global demand forecast, while rising COVID-19 case numbers in China clouded the outlook for fuel consumption in the world’s top crude importing nation.

    Brent crude futures LCOc1 fell 39 cents, or 0.4%, to $92.75 a barrel by 0133 GMT after settling down 3% on Monday. US West Texas Intermediate crude CLc1 was at $85.31 a barrel, down 56 cents, or 0.7%, after tumbling 3.5% in the previous session.

    The Organization of the Petroleum Exporting Countries (OPEC) cut its 2022 global oil demand growth forecast for a fifth time since April, citing mounting economic challenges including high inflation and rising interest rates.

    This comes after the International Monetary Fund said on Sunday that the global economic outlook has become gloomier than projected last month, citing a steady worsening in purchasing manager surveys in recent months

    Meanwhile, though investors cheered China’s announcements last week that it would lessen the impact of a strict zero-COVID policy to spur economic activity and energy demand, ANZ analysts said surging case numbers continue to be a key downside risk.

    “The market is currently defying looming supply risks, despite expectations that the latest demand downgrade could be supply-negative for OPEC oil output,” the analysts said, referring to imminent European Union sanctions on Russian oil exports.

    Elsewhere, oil output in the Permian Basin is set to hit another record of 5.499 million barrels per day (bpd) in December, the U.S. Energy Information Administration (EIA) said in its monthly productivity report on Monday.

    However, aging shale regions are showing weaker per-well output, causing overall U.S. crude oil production in shale regions to rise by a mere 91,000 bpd to 9.191 million bpd in December, despite a surge in prices, the EIA said.

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  • Crude oil prices edge lower amid China COVID-19 woes, Brent hits $92.77/bbl

    Crude oil prices edge lower amid China COVID-19 woes, Brent hits $92.77/bbl

    Oil prices inched lower on Tuesday, extending losses of 1% from the previous session as more extensive COVID-19 curbs in China increased fears of slowing fuel demand in the world’s second-largest oil consumer.

    Brent crude for January delivery was down 4 cents at $92.77 a barrel at 0112 GMT. The December contract expired on Monday at $94.83 a barrel, down 1%.

    US West Texas Intermediate (WTI) crude fell 18 cents, or 0.2%, to $86.35 a barrel.

    COVID-19 curbs in top crude oil importer China forced the temporary closure of Disney’s Shanghai resort on Monday, while production of Apple Inc iPhones at a major contract manufacturing facility could drop by 30% in November.

    “With China sticking to the zero-COVID policy, the oil demand outlook overshadowed a record of US oil export data from last week,” CMC Markets analyst Tina Teng said.

    Strict pandemic restrictions have caused China’s factory activity to fall in October and cut into its imports from Japan and South Korea.

    Also weighing on sentiment was the world’s largest independent oil trader Vitol saying that its sees signs of oil demand destruction, ANZ Research analysts said in a note.

    Pressuring oil prices, US oil output climbed to nearly 12 million barrels per day (bpd) in August, highest since the start of the COVID-19 pandemic, even as shale companies said they do not expect production to accelerate in coming months.

    That is likely to lead to a rise in US crude oil stocks in the week to Oct. 28 of about 300,000 barrels, while distillate and gasoline inventories were expected to fall, a preliminary Reuters poll showed.

    The poll was conducted ahead of reports from the American Petroleum Institute due at 4:30 p.m. EDT (2030 GMT) on Tuesday, and the Energy Information Administration due at 10:30 a.m. (1430 GMT) on Wednesday.

    Brent and WTI benchmarks ended October higher, marking their first monthly gains since May after the Organization of the Petroleum Exporting Countries and its allies including Russia announced plans to cut output by 2 million bpd.

    OPEC raised its forecasts for world oil demand in the medium-and longer-term on Monday, saying that $12.1 trillion of investment is needed to meet this demand despite the transition to renewable energy sources. 

    US President Joe Biden has called on oil and gas companies to use their record profits to lower costs for Americans and increase production, or pay a higher tax rate.

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  • Weekly Market Wrap: Nifty, Sensex posted gains in 2nd straight week as US GDP growth eases recession fears

    Weekly Market Wrap: Nifty, Sensex posted gains in 2nd straight week as US GDP growth eases recession fears

    The BSE Sensex gained 652.70 points, or 1.1 per cent, at 59,959.85 during the week ended October 28, 2022, while the Nifty inclined 210.5 points, or 1.2 per cent to 17,786.80. Market participants got some encouragement as US GDP growth of 2.6 per cent in the third quarter and falling crude oil prices eases recession fear. Also, a report from a private rating agency states that the Indian economy’s recovery from the coronavirus pandemic, as well as the pace of the economy is better as compared to global peers despite headwinds such as high inflation, monetary policy tightening, rising interest rate, and the Russia-Ukraine war.

    Market veteran Vinod Nair, Head of Research at Geojit Financial Services, said: “The domestic market remained flat with a positive bias during the week as favourable domestic cues were countered by mixed global mood. The US GDP grew by 2.6 per cent during the quarter that ended in September. However, it failed to lift the market as US tech stocks saw a significant sell-off following disappointing quarterly results and a bleak forecast. The ECB raised interest rates by 75 basis points, also signalling that it is making progress in combating record inflation, though the plausibility of a recession grew.”

    “The expectation that the central banks would slow down the pace of rate hikes from the beginning of CY23 gave comfort to the global markets. As a result, bond yields across the globe softened, with the US 10yr yield diving below 4 per cent. The strengthening rupee, along with a softening treasury yield and decent Q2 earnings results, will support the domestic market in the near term”, he added.

    As many as 40 stocks in the Nifty 50 index delivered a positive return to investors in the passing week. With a gain of (9.1 per cent), Maruti Suzuki India emerged as the top gainer in the index. It was followed by JSW Steel (up 7.8 per cent), NTPC (up 5.5 per cent), Larsen & Toubro (up 5.3 per cent), and Power Grid Corporation of India (up 4.5 per cent).

    Mahindra & Mahindra, Apollo Hospitals Enterprise and Shree Cement also advanced by over 4 per cent. On the other hand, Hindustan Unilever, Bajaj Finance, and HDFC Life Insurance Co declined 4.9 per cent, 2.5 per cent and 2.2 per cent, respectively.

    Sector-wise, the BSE Auto index gained 3.9 per cent during the week gone by. BSE Oil & Gas index has also given a 3.3 per cent return. While BSE Capital Goods, BSE Metal, BSE Power and BSE Realty indices also surged more than 2 per cent. In contrast, the BSE Fast Moving Consumer Goods index has declined by 1.0 per cent.

    Market watcher Rupak De, Senior Technical Analyst at LKP Securities, said: “Nifty remained volatile during the day before closing on a muted note. The consolidation continued as the index failed to give any directional move. On the daily timeframe, the index has sustained above the crucial moving average, confirming the short-term uptrend. Over the short term, the trend may remain sideways to positive. On the lower end, support is visible at 17,700/17,550; resistance on the higher end is placed at 17,850/17,950”.

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  • Crude oil prices start session mixed on uncertain demand, supply concerns; Brent hits $92.13/bbl

    Crude oil prices start session mixed on uncertain demand, supply concerns; Brent hits $92.13/bbl

    Oil prices opened mixed in early Asian trade on Thursday as investors balanced caution over tightening supply against lower demand projections.

    Brent crude futures for December settlement LCOc1 fell 28 cents, or 0.3%, to $92.13 a barrel by 0010 GMT. US West Texas Intermediate crude for November delivery (WTI) CLc1, which expires on Thursday, rose 34 cents, or 0.4%, to $85.89 per barrel.

    In remarks Wednesday, US president Joe Biden said he plans to sell 15 million barrels of crude oil from the Strategic Petroleum Reserve and repurchase oil if prices fall enough. The reserve release would be the last sale from the planned sale of 180 million barrels of oil announced shortly after Russia invaded Ukraine in February.

    However, a looming European Union ban on Russian crude and oil products and the output cut from the Organization of the Petroleum Exporting Countries and other producers including Russia, known as OPEC+, of 2 million barrels per day supported prices.

    Global demand for fuel remains uncertain. US economic activity expanded modestly in recent weeks, although it was flat in some regions and declined in a couple of others, the Federal Reserve said on Wednesday in a report that showed firms growing more pessimistic about the outlook.

    US crude inventories fell unexpectedly last week – down 1.7 million barrels, weekly government data showed, against expectations for a build of 1.4 million barrels. SPR levels fell 3.6 million barrels to just over 405 million, the lowest since May 1984. 

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  • Crude oil prices rise on supply woes; Brent hits $90.76/bbl

    Crude oil prices rise on supply woes; Brent hits $90.76/bbl

    Oil prices rose in early Asian trade on Wednesday, paring losses from the previous session, as concern over tight supplies following reports of lower inventories in the United States offset fears of lower demand from top oil importer China.

    Brent crude futures LCOc1 rose 73 cents, or 0.8%, to $90.76 a barrel by 0100 GMT. US West Texas Intermediate crude CLc1 was at $83.95 a barrel, up $1.13, or 1.4%. WTI’s front-month contract expires on Thursday.

    Brent and WTI touched two-week lows and tumbled 1.7% and 3.1%, respectively, in the previous session on reports of US President Joe Biden’s plans to release more barrels from the Strategic Petroleum Reserve (SPR) and worries about weaker Chinese fuel demand.

    US crude oil stocks fell by about 1.3 million barrels for the week ended Oct. 14, according to market sources citing American Petroleum Institute figures on Tuesday. 

    US crude inventories were expected to have increased for a second consecutive week, rising by 1.4 million barrels in the week to Oct. 14, an extended Reuters poll showed on Tuesday. 

    Inventory data from the Energy Information Administration, the statistical arm of the US Department of Energy, is due at 10:30 a.m. (1430 GMT) on Wednesday.

    Oil prices were also buoyed by better risk sentiment which was lifted by upbeat US corporate earnings and a pause in the surge in bond yields, CMC Markets analyst Tina Teng said. 

    “Hence, the recession fear-led selloff in the oil markets eased,” Teng added.

    Earlier in October, OPEC+ – which comprises the Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia – agreed on a steep oil production cut of 2 million barrels per day.

    Following White House accusations that Saudi Arabia coerced some nations into supporting the move, OPEC’s secretary-general said on Tuesday that the decision from the oil producers group was unanimous. 

    The OPEC+ production cut, which comes ahead of a European Union embargo on Russian oil, will squeeze supply in an already tight market. The European Union’s sanctions on Russian crude and oil products will take effect in December and February, respectively.

    “We expect Russian production to decline by 0.6 million barrels per day by year-end (in addition to the 400,000 barrels per day drop since February), as Europe implements both its embargo on Russian oil purchases as well as a ban on crucial services like shipping, insurance and financing,” JP Morgan analysts said in a note.

    To plug the gap, the Biden administration is planning to release more oil from the SPR to dampen fuel prices before next month’s congressional elections. 

    In December, the administration plans to sell 15 million barrels of oil from its reserves, the remainder of the 180 million barrels release announced earlier this year, a senior US official said.

    “The price at the pump is an important weekly reminder for the consumer and energy traders should not be surprised if Biden continues to be aggressive in tapping the SPR,” ANZ Research analysts said in a note.

    In Europe, EU’s emergency oil stocks, including crude oil and petroleum products, recovered slightly in July after two coordinated releases drained the levels to a record low in June, but were still 3.7% lower than in July 2021, the bloc’s statistic office said on Tuesday. 

    Oil price gains were capped by fears of weaker fuel demand from China as it persists with its stringent zero-COVID policy.

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  • Indian rupee’s depreciation essentially due to strengthening of dollar index: SBI chairman

    Indian rupee’s depreciation essentially due to strengthening of dollar index: SBI chairman

    The Indian rupee has weakened essentially due to the strengthening of the dollar index but it is holding well as compared to currencies of other emerging market economies, State Bank of India Chairman Dinesh Khara said.

    Depreciation of the rupee is a cause of concern, especially for a country that has significant imports, Khara told PTI in an interview on the sidelines of the annual meeting of the International Monetary Fund and the World Bank here on Friday.

    The rupee closed at 82.19 against the US dollar on Friday amid a firm greenback overseas and sliding crude oil prices.

    At the interbank foreign exchange market, the local currency opened at 82.26 and witnessed a high of 82.12 and a low of 82.43 before settling at 82.19.

    The dollar index, which gauges the greenback’s strength against a basket of six currencies, advanced 0.56 per cent to 112.99.

    The Indian rupee is doing pretty well, Khara said.

    “Better than us was only Indonesia, which is generally a commodity economy and Brazil. So, these are the only two currencies which did better than us,” he said.

    “It is essentially the strengthening of the dollar index… which is the cause of the weakness that we have seen in the rupee,” he said.

    “I would say that the (Indian) currency has not behaved as volatile as perhaps the rest of the global currencies,” he added.

    Khara said even though the rupee is holding ground, its depreciation is a cause of concern.

    “It is very much a cause of concern, particularly for an economy which has got significant imports. But… when the dollar is struggling, how much can the rupee hold? Still, I think in the given situation and circumstances, the rupee is holding well,” he said.

    Referring to the interventions by the Reserve Bank of India, he said they are ways to check volatility.

    “Typically speaking, financial markets don’t really appreciate the volatility. It is also one of the functions (of the RBI) to ensure orderly movement of the currency,” he said.

    “To that extent, it is more or less holding its value. But in the larger interests, perhaps some kind of interventions are required. And that is being done,” he said.

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  • Crude oil prices slide as dollar strengthens; Brent hits $95.62/bbl

    Crude oil prices slide as dollar strengthens; Brent hits $95.62/bbl

    Oil prices fell on Tuesday, extending nearly 2% losses in the previous session, as a stronger US dollar and a flare-up in COVID-19 cases in China increased fears of slowing global demand.

    Brent crude futures LCOc1 fell 57 cents, or 0.6%, to $95.62 a barrel by 0031 GMT, after falling $1.73 in the previous session.

    US West Texas Intermediate crude CLc1 was at $90.58 a barrel, down 55 cents, or 0.6%, after losing $1.51 in the previous session.

    The US dollar rose for a fourth straight session on Monday as investors braced for high inflation data released this week, leading to expectations of continued aggressive monetary policy from the Federal Reserve. 

    A strong greenback reduces demand for oil by making it more expensive for buyers using other currencies.

    Rate increases to date were starting to slow the economy and the full brunt of tighter policy would not be felt for months to come, Fed Vice Chair Lael Brainard said on Monday. 

    “Strong jobs data has strengthened expectations of another 75 basis points rate hike at next month’s Fed meeting, leaving downside risk for global oil demand,” said ANZ Research analysts in a note.

    The sustained zero COVID-19 policy in China ahead of a Communist Party congress is “not helping” demand, the analysts added.

    COVID-19 cases in the world’s second-largest oil consumer rose to their highest since August. Its services activity in September contracted for the first time in four months, as pandemic restrictions weighed.

    Thousands of cases caused by the highly transmissible Omicron sub-variants BF.7 have been reported in Inner Mongolia since the start of October, turning the region into the country’s latest COVID epicentre.Read full storyRead full story

    Capping losses, the Organization of the Petroleum Exporting Countries and allies including Russia, together known as OPEC+, decided last week to lower their output target by 2 million barrels per day, further raising concerns about tightening oil supplies.

    “The supply issues remain due to sanctions on Russia, especially when the EU bans imports of Russia’s oil towards the year-end,” said CMC Markets analyst Tina Teng.

    EU sanctions on Russian crude and oil products will take effect in December and February respectively while the bloc last week gave its final approval for a new batch of sanctions against Russia including a price cap on Russian oil exports. 

    India maintains a “healthy dialogue” with Russia and will look at what is offered following an announced ownership revamp to the Sakhalin-1 oil and gas project, Petroleum Minister Hardeep Singh Puri told Reuters. 

    On Friday, Russia issued a decree allowing it to seize Exxon Mobil’s 30% stake and gave a Russian state-run company the authority to decide whether foreign shareholders including India’s ONGC Videsh can retain their participation in the project.

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