Oil prices rise for third day in row after weekly drop
2022.12.14 13:46
Oil prices rise for third day in row after weekly drop
Budrigannews.com – Oil prices increased for the third day in a row as traders focused on the shutdown of the Keystone pipeline in Canada, which is essential to refiners on the West Coast of the United States, rather than the significant weekly increase in crude inventories in the United States.
Oil sentiment was also boosted, along with sentiment in other risk assets, by expectations that the will begin its long-awaited pivot on monetary tightening by slowing rate hikes for the first time since March.
A rise in road and air traffic in China following the reopening of cities under coronavirus lockdowns also contributed to the fervor of an oil market emerging from its sharpest weekly loss in nine months. Stronger demand outlooks for oil from producer group OPEC+ and the International Energy Agency, which oversees the interest of consumers, added to the market’s upside.
John Kilduff, a founding partner of the energy hedge fund Again Capital in New York, stated, “It’s going to be a cold stretch during Christmas as well, so this upside has some fundamental support as well.”
For the second day in a row, Brent oil, which comes from the United Kingdom, and WTI crude, which comes from the United States, experienced a rally of at least 3%. That set the two benchmarks up around 9% on the week, recuperating 33% of last week’s dive of practically 12%.
By 13:00 ET (8:00 GMT), crude was up $2.24, or 2.8%, trading at $82.92. In the previous two sessions, it increased by about 6%. Last week, the global crude benchmark dropped $9.47, or 11%, to $75.14, a low not seen since December 23, 2021.
for delivery increased by $2.30, or 3%, to $77.69 in January. WTI, like Brent, has gained 6% over the past two sessions. The benchmark U.S. crude ended the week down $9.28, or 11%, making it the worst week since March 25. WTI hit a session low of $70.11 last week, the lowest it had been since December 21, 2021.
The 622,000 barrel-per-day Keystone pipeline that transported heavy Canadian crude to the U.S. Gulf Coast of Mexico was shut down during this week’s oil rally.
TC Energy, from Canada (NYSE:) The pipeline was shut down on Wednesday after it was discovered to have leaked more than 14,000 barrels of oil last week in Kansas, making it the largest oil spill in the United States in nearly a decade. The time required to clean up and reopen the pipeline has not been specified.
TC Energy claimed that it was excavating around the pipeline and had not yet identified the source of the leak. At the storage hub in Cushing, Oklahoma, where benchmark U.S. crude oil futures are delivered, it is anticipated that the outage will reduce supply.
After four consecutive jumbo hikes of 75 basis points from June to November, traders anticipated that the Federal Reserve would announce a 50-basis-point increase for the central bank’s December rate later on Wednesday.
More Oil will be above $100 in 2023-Morgan Stanley
Regarding the outlook for demand, the producer group OPEC+ stated that it anticipates that oil demand will rise by 2.25 million barrels per day (bpd) to 101.8 million bpd next year, with China, the world’s largest importer, providing potential upside.
The oil consumers’ alliance (IEA), based in Paris, predicted that Chinese oil demand would resume the following year after falling by 400,000 bpd in 2022. The alliance increased its estimate of the growth of oil demand in 2023 to 101.6 million barrels per day, or 1.7 million bpd.
According to data from the Energy Information Administration, or EIA, crude stockpiles in the United States rose for the first time in five weeks last week as refiners slowed down after massively producing fuel products in advance of the winter.
According to the EIA’s Weekly Petroleum Status Report, it increased by 10.231 million barrels in the week ending December 9 after drawing 26.86 million barrels over the previous five weeks.
The EIA stated that refineries operated at 92.2 percent of their operable capacity last week, compared to 95.5% the week prior to December 2.
The roll out in fuel products thinned in line with the crude build.
after a build of 5.32 million barrels the week before, it increased by 4.496 million barrels in the week ending December 9. The most popular fuel for automobiles in the United States is gasoline.
, on the other hand, increased by 1.364 million barrels last week, compared to 6.159 million the week before. Distillates are refined into diesel for trucks, transports, trains and ships as well as fuel for jets.
New fuel supplies arrived in varying quantities, indicating uneven demand.
The market’s supply of finished motor gasoline decreased by 103,000 barrels per day last week to 8.255 million barrels per day.
In contrast, the daily production of distillate fuel oil increased by 218,000 barrels to 3.768 million barrels.
The daily production of kerosene-type jet fuel increased by 377,000 barrels, reaching 1.386 million barrels.
