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Crude Oil

Oil Prices Dip to Lowest Level Since Late March on Recession Fears and Rising Gasoline Inventories

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Crude Oil

Oil prices took a sharp dive on Thursday, dropping by about $2 per barrel to their lowest level since late March.

Investors King analysis showed that the decline in oil prices was driven by growing fears that a possible recession could affect fuel demand, as well as a rise in gasoline inventories.

Brent crude oil, the international benchmark for Nigerian oil, fell by $1.98, or 2.4% to trade at $81.14 a barrel at 6:00 om while West Texas Intermediate crude (WTI) futures dropped $2.05, or 2.6%, to $77.11 a barrel.

The fall in oil prices is also being linked to disappointing results from companies such as Tesla, which has impacted equities markets that often move in tandem with oil prices.

According to Bob Yawger, Executive Director of Energy Futures at Mizuho, “At the end of the day, one of the big reasons why we’re sliding is fear of recession.”

The increase in gasoline inventories is another factor contributing to the drop in oil prices. U.S. crude stockpiles fell by 4.6 million barrels, while gasoline inventories jumped unexpectedly, according to the U.S. Energy Information Administration. Implied gasoline demand also fell 3.9% from year-ago levels to 8.5 million barrels a day.

However, there are some positive signs for the oil industry. Economists polled by Reuters expect the U.S. Federal Reserve to end its tightening with a final 25 basis point rate rise in May, easing concerns about a recession in the world’s largest oil-consuming nation.

Meanwhile, persistent double-digit inflation in Britain has bolstered expectations of a further Bank of England rate hike.

While Pakistan has placed its first order for discounted Russian crude under a new deal, which could cover 100,000 barrels per day, according to the country’s petroleum minister.

Oil loading from Russia’s western ports in April is also expected to rise to the highest since 2019, according to trading and shipping sources.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Crude Oil

Oil Prices Slide as U.S. Crude Stockpiles Surge, Heightening Demand Concerns

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Crude oil

Oil prices declined on Thursday as concerns over demand intensified due to a larger-than-anticipated build in U.S. crude stockpiles.

Brent crude oil, against which Nigerian oil is priced, dropped by 0.5% to $83.25 a barrel while U.S. West Texas Intermediate crude oil fell by 0.3% to $78.28 a barrel.

The Energy Information Administration’s report revealed a substantial increase in U.S. crude oil stockpiles by 4.2 million barrels to 447.2 million barrels for the week ending February 23rd.

This surge surpassed analysts’ expectations and marked the fifth consecutive week of rising inventories.

While gasoline and distillate inventories witnessed a decline, concerns regarding a sluggish economy and reduced oil demand in the U.S. were amplified.

Satoru Yoshida, a commodity analyst with Rakuten Securities, highlighted that the significant stockpiles have heightened investor worries.

Moreover, the anticipation of delayed U.S. interest rate cuts further weighed on market sentiment, potentially undermining oil demand.

Traders have adjusted their expectations for rate cuts, with an easing cycle predicted to commence in June rather than March as previously anticipated.

Market participants await the U.S. personal consumption expenditures price index for insights into inflation trends, while the possibility of an extension of voluntary oil output cuts from OPEC+ looms over price dynamics, amid lingering uncertainty in the demand outlook and geopolitical tensions in the Middle East.

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Crude Oil

Crude Oil Shortage Threatens Dangote, Government Refineries, Minister Raises Alarm

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Dangote Refinery

The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, has sounded a clarion call over a looming crude oil shortage that threatens the operations of the newly inaugurated Dangote Petrochemical Refinery and government-owned refineries in Nigeria.

Addressing stakeholders at the seventh edition of the Nigeria International Energy Summit in Abuja, Minister Lokpobiri expressed concerns that unless deliberate efforts are made to increase investments and crude oil production, these refineries may struggle to obtain enough feedstock for petroleum product manufacturing.

The Dangote refinery, a colossal project spearheaded by Dangote Industries Limited, has a daily requirement of up to 650,000 barrels of crude oil, while government-owned refineries could need approximately 400,000 barrels.

However, the current pace of crude oil production and investment in Nigeria falls short of meeting these demands.

Minister Lokpobiri highlighted the need to ramp up production and attract investments in the upstream sector to ensure adequate feedstock supply for the refineries.

He emphasized the importance of efficiently utilizing Nigeria’s abundant oil and gas reserves to enhance domestic energy security and economic prosperity.

Furthermore, the minister underscored the significance of investing in energy infrastructure and transitioning towards more environmentally friendly practices to address Nigeria’s energy needs effectively.

The alarm raised by Minister Lokpobiri underscores the urgency for strategic interventions and collaborative efforts to mitigate the impending crude oil shortage and secure the future of Nigeria’s refining industry amidst evolving global energy dynamics.

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Crude Oil

Oil Prices Surge as Brent Approaches $83, WTI Nears $78 Amidst Refinery Buying Activity

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Crude oil - Investors King

Oil prices surged as Brent crude oil approached the $83 price level while West Texas Intermediate (WTI) neared $78 as refineries in the United States and China increased purchases.

Brent crude oil, against which Nigerian oil is priced, gained 1.1% on Monday, signaling a bullish trend in the oil market.

The recent uptick in oil prices comes amidst signs of heightened demand from refineries, particularly in key markets like the US and China.

This surge in demand has contributed to the strengthening of timespreads, indicating tighter conditions in the near term.

Market observers are closely monitoring the International Energy Week in London, where industry leaders are convening to discuss the outlook for the global energy market.

Scheduled speakers include Russell Hardy, the CEO of Vitol Group, a major player in the energy sector.

While tensions in the Middle East and production cuts by the OPEC+ alliance have supported crude prices, increased production from non-OPEC+ countries, notably the US, has capped potential gains.

Analysts predict that oil prices may continue to trade within a range, with Brent crude expected to hover around $83, while WTI remains near the $78 mark, barring significant shifts in market dynamics.

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