Oil prices are under renewed pressure as the market looks for direction
Oil prices traded lower on Thursday, reversing some of the previous day’s gains as the commodity market tries to find a foothold amid the tug of war between supply and demand.
price movement
-
WTI June delivery CL00,
-1.34% CLM22,
-1.34% CL.1,
-1.34%
It fell about $1.84, or 1.8 percent, to $103.78 a barrel. The contract rose 6% to settle at $105.71 a barrel on the New York Mercantile Exchange on Wednesday. -
Brent crude July BRN00,
-1.47% BRNN22,
-1.47% And
The global benchmark fell $1.68, or 1.7 percent, to $105.83 a barrel. The contract rose 4.9% to close at $107.51 a barrel on the European ICE Futures Exchange on Wednesday. -
June Natural Gas NGM22,
-2.40%
It fell 2.3 percent to $7.46 per million British thermal units, after closing up 3.5 percent in the previous session. -
June Gasoline RBM22,
+ 0.90%
It fell 0.3 percent to $3.674 a gallon. June heating oil HOM22
-2.31%
It fell 2.9 percent to $3.834 a gallon.
Market Drivers
Wednesday’s gains came amid an improvement on the COVID front in China, a bullish outlook for oil by Morgan Stanley, and with the market surpassing a stronger-than-expected rise in US consumer price inflation to 8.3% in April.
Oil maintained its strength after the Energy Information Administration said that US crude inventories jumped by 8.5 million barrels last week. Analysts surveyed by S&P Global Commodity Insights expected, on average, a decline of 1.8 million barrels.
But US crude and Brent crude have lost more than 5% this week, as investors grapple with a range of factors affecting both supply and demand.
The slide in oil prices on Thursday “highlights how traders are struggling to get the correct pricing of the world’s most important energy contracts as focus continues to alternate between shutdowns in China hurting demand and rising inflation killing growth,” said Ole Hansen, head of commodity strategy at Saxo Bank. economic”.
This is because the European Union has not yet agreed to sanctions on Russian crude oil,” while Saudi Arabia and the UAE have warned that all energy sectors are running out of capacity. “The basis for this market appears to be supported as stocks of fuels such as diesel and gasoline continue to fall,” Hansen said.
Monthly oil reports were issued by both the International Energy Agency and OPEC. The International Energy Agency has warned that tightening sanctions on Russia’s oil exports could bring its crude oil production back nearly two decades.
Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) lowered its forecast for annual global oil demand to 3.4 million barrels per day in 2022, down 300,000 barrels per day from its forecast in April.
In Europe, gas prices rose in part due to the disruption of the Russian pipeline that runs through Ukraine. Also, German Economy Minister Robert Habeck accused Russia of weaponizing energy, after Moscow announced late Wednesday the imposition of sanctions on Western energy companies and a decline in European gas shipments.
Russia has reportedly seized a German unit of Gazprom, whose shipments to Germany have been reduced, although this represents only 3% of the country’s imports from Russia, according to Bloomberg. Ukraine’s natural gas pipeline operator on Wednesday halted Russian shipments through a major hub in the east of the country,
Natural gas in the Netherlands-based TTF mall rose 20% for the July contract to 115,570 euros per megawatt. UK natural gas price contract GWM00,
It rose 37% to $191 a heat.
/cloudfront-us-east-2.images.arcpublishing.com/reuters/XZZFSSNZJVLRJJFL3FVDON6KEA.jpg?ssl=1)
Leave a Comment