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Tag: US WTI crude futures

  • 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 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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