Oil declining having failed to resume growth
2023.01.24 15:09
Oil declining having failed to resume growth
By Kristina Sobol
Budrigannews.com – On Tuesday, worries about a slowdown in the global economy and an anticipated rise in oil inventories in the United States weighed on crude oil prices.
By 12:46 p.m. EST (1746 GMT), Brent futures for March delivery had lost 1.5% to $86.83 a barrel, down $1.36. to $80.51 per barrel, down $1.11, or 1.4 percent.
Although the downturn moderated across both the manufacturing and services sectors for the first time since September, U.S. business activity contracted in January for the seventh consecutive month, and business confidence improved as the new year began.
OANDA analyst Edward Moya wrote in a note:
that the U.S. economy “still could roll over” and that “some energy traders are still sceptical on how quickly China’s crude demand will bounce back this quarter.”
In January, business activity in the Eurozone unexpectedly returned to modest growth, according to S&P Global (NYSE:). the instantaneous Composite Purchasing Managers’ Index (PMI) was displayed. However, private sector economic activity in the United Kingdom decreased at its fastest rate in two years.
According to the median opinion of economists polled by Reuters, economies in the six-member Gulf Cooperation Council (GCC) will grow at a rate half that of 2022 this year as oil revenues fall due to an anticipated mild global slowdown.
A preliminary Reuters poll found on Monday that U.S. crude oil stocks were expected to rise by about 1 million last week, while distillate stocks were expected to fall.
The American Petroleum Institute’s and the Energy Information Administration’s reports are due on Tuesday at 4:30 p.m. ET (2130 GMT) and at 10:30 a.m. (1530 GMT) respectively.
Five OPEC+ sources said on Tuesday that an OPEC+ panel is likely to approve the producer group’s current oil output policy when it meets next week. This is because hopes of higher Chinese demand driving an oil price rally are balanced by concerns about inflation and a slowdown in the global economy. Bank JP Morgan raised its forecast for Chinese crude demand but kept its projection for a price average of $90 a barrel for in 2023.
According to an analyst note:
“it would be difficult for oil prices to breach $100 in 2023 absent any major geopolitical events” because “there should be more supply than demand this year.”
Crude oil prices in physical markets have risen this year in response to trader concerns that sanctions on Russia could reduce supply and an increase in Chinese purchases following the lifting of pandemic controls.
Halliburton, a US oilfield services company (NYSE:) Co said that due to rising oil prices and increased drilling, its shale oil-well fracking equipment is still fully booked.
Concerns about a global business cycle downturn have eased, and investors have returned to petroleum futures and options at the fastest rate in more than two years.
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