Connect with us

Crude Oil

Oil Prices Hold Steady as Debt Ceiling Talks Weigh on Optimism, Supply Concerns Persist

Published

on

Crude oil - Investors King

Oil prices remained stable on Monday amid ongoing caution surrounding U.S. debt ceiling negotiations, dampening optimism for future demand despite lower supplies from Canada and OPEC+ producers.

Brent crude oil, the international benchmark for Nigerian oil, inched up by 0.2%, or 13 cents to $75.71 per barrel at 11:00 am. Meanwhile, the more actively traded U.S. West Texas Intermediate (WTI) crude for July delivery rose by 0.20%, or 12 cents, to $71.81.

However, the June WTI contract, set to expire later in the day, experienced a slight dip of 10 cents, closing at $71.45 per barrel.

Concerns over a potential default on U.S. debt prompted the resumption of talks in Washington on Monday. The prospect of a default and its potential consequences, such as an economic downturn and reduced fuel demand, continued to unsettle the markets.

While the International Energy Agency (IEA) warned of an impending supply shortage in the second half of the year, with demand expected to surpass supply by nearly 2 million barrels per day (bpd), the Paris-based agency stated this in its latest monthly report.

Vandana Hari, founder of oil market analysis provider Vanda Insights, anticipates increased volatility in the days ahead and a subsequent uptick in crude prices once a deal to raise the debt ceiling is reached.

Last week, both oil benchmarks experienced a 2% gain, marking their first weekly increase in five weeks. This gain was driven by wildfires that disrupted significant crude supply in Alberta, Canada.

The impact of voluntary production cuts implemented by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia (known as OPEC+), is also being felt following their recent enforcement.

According to JP Morgan, total exports of crude and oil products from the OPEC+ group decreased by 1.7 million bpd by May 16. The report also predicts a likely decline in Russian oil exports by the end of May.

During their annual leaders’ meeting, the Group of Seven (G7) nations pledged to intensify efforts to address Russia’s circumvention of price caps on its oil and fuel exports. However, specific details were not disclosed, and the overall impact on crude and oil product supply remains uncertain, as stated by IEA Executive Director Fatih Birol in an interview with Reuters at the G7 summit.

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.

Continue Reading
Comments

Crude Oil

Oil Prices Continue to Slide: Drops Over 1% Amid Surging U.S. Stockpiles

Published

on

Crude Oil

Amidst growing concerns over surging U.S. stockpiles and indications of static output policies from major oil-producing nations, oil prices declined for a second consecutive day by 1% on Wednesday.

Brent crude oil, against which the Nigerian oil price is measured, shed 97 cents or 1.12% to $85.28 per barrel.

Similarly, U.S. West Texas Intermediate (WTI) crude slumped by 93 cents or a 1.14% fall to close at $80.69.

The recent downtrend in oil prices comes after they reached their highest level since October last week.

However, ongoing concerns regarding burgeoning U.S. crude inventories and uncertainties surrounding potential inaction by the OPEC+ group in their forthcoming technical meeting have exacerbated the downward momentum.

Market analysts attribute the decline to expectations of minimal adjustments to oil output policies by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, until a full ministerial meeting scheduled for June.

In addition to concerns about excess supply, the market’s attention is also focused on the impending release of official government data on U.S. crude inventories, scheduled for Wednesday at 10:30 a.m. EDT (1430 GMT).

Analysts are keenly observing OPEC members for any signals of deviation from their production quotas, suggesting further volatility may lie ahead in the oil market.

Continue Reading

Crude Oil

Brent Crude Approaches $86 Following Moscow Attacks

Published

on

Brent crude oil - Investors King

Amid escalating geopolitical tensions following the devastating terrorist attacks in Moscow, global oil markets rose with Brent crude oil hitting a $86 price level.

The tragic events in the Russian capital, which claimed the lives of over 130 innocent civilians, sent shockwaves through international communities and rattled energy markets already grappling with supply uncertainties.

Speculation surrounding the attacks, claimed by the Islamic State but with hints of potential Ukrainian involvement from Russian President Vladimir Putin, intensified concerns about potential disruptions to oil supplies.

Also, ongoing drone strikes by Ukraine targeting Russian infrastructure further exacerbated worries about the stability of crude oil production and refining capabilities in the region.

The mounting geopolitical unrest in key oil-producing regions has injected a sense of urgency into the market, with investors closely monitoring developments for potential impacts on global supply and demand dynamics.

Despite recent fluctuations, crude oil is poised for a third consecutive monthly gain, buoyed by efforts from the OPEC+ alliance to maintain production cuts and bolstered by tightening US sanctions on Russian energy exports.

The bullish sentiment is further supported by positive commentary on the broader commodities outlook, with central banks signaling potential interest rate reductions to stimulate economic growth, thus underpinning industrial and consumer demand for raw materials.

Analysts remain cautiously optimistic about the trajectory of oil prices, citing a delicate balance between supply risks and supportive macroeconomic factors amidst the backdrop of geopolitical turmoil.

As Brent crude inches closer to the $86 threshold, market participants brace for continued volatility amid unfolding geopolitical developments.

Continue Reading

Crude Oil

Indian Refiners Shun Russian Crude Carried by Sovcomflot Tankers Amidst US Sanctions

Published

on

Crude Oil - Investors King

Indian refiners have taken a bold stance by refusing to accept Russian crude oil carried on PJSC Sovcomflot tankers, citing stringent US sanctions.

This decision marks a significant shift in India’s energy strategy and underscores the profound impact of global politics on the oil trade.

The move comes in the wake of heightened scrutiny on Sovcomflot tankers following sanctions imposed by the US Treasury’s Office of Foreign Assets Control.

Designating Sovcomflot and identifying specific crude oil tankers, the US has intensified its efforts to clamp down on entities linked to Russia, particularly in the aftermath of the Ukraine invasion.

Indian Oil Corp., Bharat Petroleum Corp., Hindustan Petroleum Corp., Mangalore Refinery & Petrochemicals Ltd., and Nayara Energy Ltd. have all halted the acceptance of cargoes carried on Sovcomflot vessels.

This unified action underscores the severity of the situation, with refiners diligently scrutinizing tanker ownership to ensure compliance with sanctions.

The repercussions of this decision are reverberating throughout the oil market, leading to disruptions in the supply chain and altering trade dynamics.

With fewer tankers available to transport Russian crude, the pricing landscape has undergone a significant shift, with discounts narrowing to compensate for higher freight costs.

Despite the challenges posed by sanctions and supply chain disruptions, India remains a key player in the global oil market.

However, the decision to shun Russian crude on Sovcomflot tankers reflects a strategic recalibration in response to evolving geopolitical realities, underscoring the complex interplay between politics and energy security on the world stage.

Continue Reading
Advertisement




Advertisement
Advertisement
Advertisement

Trending