Tag Archives: OIL PRICES

Oil rises in price due to blockage of the Suez Canal

Trading on the oil market on Friday began with a rise in prices for raw materials. Already in the morning, the price of a barrel of Brent oil rose by 0.86% to $62 48 cents. A barrel of WTI crude rose 1.13% to $59.22.

The situation in the Suez Canal contributes to the growth of oil prices. It is actually blocked for the movement of ships, including oil tankers. The problem arose after a 400-meter container ship ran aground.

How long it will last is still unknown. Experts note the uncertainty in the oil market. This is indicated by high volatility.

More significant growth in oil prices is hindered by the difficult epidemiological situation in the United States and Europe. The number of diseases continues to grow. The authorities of a number of countries were forced to take additional decisions on restrictive measures.

This development of events raises concerns among investors about the suspension of growth in demand for oil.

The third wave of COVID-19 hits oil prices

Benchmark oil prices are rapidly declining — the price of Brent has already reached $62 per barrel. The reason was the increase in the incidence of COVID-19 and the third wave of the pandemic in Europe. This leads to the introduction of strict quarantine restrictions, which clouds the prospects for oil demand.

The price of the May Brent crude oil futures fell to $61.98 per barrel by 17:38, according to Investing. This is 4.09% ($2.64) less than at the close of the last trading.

May WTI futures fell 4.45% ($2.74) to $58.87.

“Oil prices are falling on concerns about the third wave of coronavirus in Europe, which could negatively affect the prospects for economic recovery and energy demand,” Interfax quoted Margaret Young, an analyst at DailyFX, as saying.

Think Markets analyst Fawad Razaqzada believes demand will pick up as travel restrictions ease in the coming months, but “the impact of this will be offset to some extent by an increase in oil reserves.”

Recall that the number of deaths from COVID-19 has also increased worldwide. As for the infection rate, the global average increased by 8%, but in Europe, the increase was 12%. At the same time, anti-quarantine protests have not subsided in Europe.

Oil may fall in price by 10% due to mutation of COVID-19

Ole Hansen, head of commodity strategies at Saxo Bank, believes that the emergence of a more contagious strain of coronavirus could lead to a drop in oil prices due to possible new lockdowns. By the evening of December 23, Brent crude is trading at $51 per barrel on the London ICE stock exchange, but in the morning the price dropped to $49.

“The optimism about vaccines and monetary stimulus, which drove the dollar down, was a key factor in the rampant speculation in the markets, including the oil one. And while oil prices will continue to rise in 2021, the short-term outlook for oil has worsened, Mr. Hansen said.

“There is a risk that Brent will rebound by 10%, to $46 a barrel, before finding support.”

In December, the Brent price consolidated above $50 per barrel. This is the best indicator since March. After news of the mutation of the coronavirus in the UK, during trading on December 21, European stocks fell 3.5-4.6%.

Oil prices decline on data on growth in US inventories

The oil market reacted to the information on the dynamics of reserves in the United States. On the eve of the API reported that by the end of the week the volume of raw material reserves in the country increased by 1 million 140 thousand barrels. At the same time, analysts assumed that it would decrease by 1 million 510 thousand barrels. They also expect that on Wednesday evening the US Department of Energy will announce a decrease in oil reserves by 1 million 420 thousand barrels.

The price of a barrel of Brent oil fell to $48 67 cents or 0.35%. A barrel of WTI crude oil fell to $45 48 cents or 0.26%. Market experts note that the recent rise in oil prices was overstated.

Oil market participants are generally optimistic. They hope that the world will be able to cope with the pandemic next year. The basis for positive expectations is the successful completion of vaccine trials. Several companies announced this at once. This week, the US regulator approved the use of a vaccine developed by Pfizer and BioNTech.

It also became known about the beginning of vaccination of the population in the UK.

Oil gets cheaper due to uncertainty about OPEC+ meeting outcome

Oil quotes go down at Tuesday morning trades. Brent oil fell by 0.63% to 47 USD 58 cents per barrel. The cost of WTI oil fell by 0.71% to 45 USD 2 cents per barrel.

Investors are waiting for the results of the OPEC+ deal. The meeting started on Monday. However, no decision was made at the end of the day.

Today the discussion of the terms of the agreement was to continue. But it became known that the meeting, previously scheduled for December 1, was postponed to December 3 due to the need for additional consultations.

Experts note that there is no unanimity among the parties to the transaction regarding the possible extension of the existing restrictions on the volume of oil production. And the fact that the second day of the meeting was postponed to a later date can be considered a good sign. This means that an agreement can still be reached. It is important to the oil market.

At present, the market situation looks ambiguous. While the demand for raw materials in Europe and the United States remains weak, it is growing in Asian countries.