Commodities
Oil prices settle lower despite ongoing supply disruption concerns
Investing.com– Oil prices settled lower Friday despite ongoing supply disruption concerns as traders assessed the impact of Hurricane Milton on U.S. oil production and ongoing tensions in the Middle East.
At 2:30 p.m. ET (1830 GMT), fell 0.5% to settle at $79.04 a barrel, while fell 0.4% to settle at $75.56 a barrel.
Milton hits Florida hard
In the US, Hurricane Milton cut a destructive path across Florida, resulting in a number of fatalities and leaving millions without power.
Authorities warn it could take days to assess the full extent of the damages, but the destruction could dampen fuel consumption in the world’s largest oil producer and consumer.
Middle East risk premia
That said, for the week, both benchmarks were headed for gains of around 1%, the second straight positive week, with oil markets remaining supported by concerns over an escalation in Israel’s conflicts with both Hamas and Hezbollah.
Israel launched devastating strikes on Hezbollah targets in Lebanon this week, diminishing the prospect of a ceasefire, even as reports said the military group was seeking a deescalation.
Markets fear that an escalation in the conflict could disrupt oil supplies in the Middle East.
“The market awaits any potential Israeli retaliation against Iran for missile attacks. While the US and other Gulf nations have been pushing for Israel not to target oil infrastructure, this can’t be ruled out completely,” said analysts at ING, in a note.
On the data front, oilfield services firm Baker Hughes Friday its weekly U.S. rig count rose by two to 481.
More Chinese stimulus?
The market has also been supported by the potential for more stimulus measures from top oil importer China, after the country’s finance minister called a fiscal policy briefing for Saturday.
The markets were mostly underwhelmed by measures unveiled in late-September, but markets are now expecting Beijing to announce 2 trillion to 3 trillion yuan ($280-$420 billion) in new spending at the press conference slated for 10 pm ET.
PPI data lessens impact of consumer prices
Oil prices have pressured by some resilience in the dollar, as hotter-than-expected U.S. inflation spurred concerns over a slower pace of interest rate cuts by the Federal Reserve.
The impact was lessened Friday after US came in unchanged in September, pointing to a still-favorable inflation outlook and supporting views that the Federal Reserve would cut interest rates again next month.
The prospect of U.S. rates remaining relatively higher for longer pushed up fears that economic activity will be pressured, in turn denting demand in the world’s biggest fuel consumer.
Data showing a bigger-than-expected build in U.S. furthered concerns over slowing demand, although it had a limited impact on oil prices this week.
(Peter Nurse, Ambar Warrick contributed to this article.)
(Reuters) – Citi on Wednesday raised its oil price outlook for 2025 due to geopolitical risks centred on Russia and Iran, but noted prices were likely to ease through the second half of the year.
“The oil outlook could see heightened, sustained geopolitical risks in Iran/Russia-Ukraine potentially wipe out the 2025 oil balance surplus, but the Trump administration appears intent on dealmaking,” the bank said in a note.
Citi expects to average $67 a barrel in 2025, up from a previous forecast of $62. It also said it was lifting its average WTI crude forecast to $63/bbl, without giving its former view.
It added that it was revising up its quarterly Brent forecasts to $75/bbl in the first quarter, $68/bbl in the second, $63/bbl in the third, and $60/bbl in the fourth, also without specifying its previous expectations.
The Biden administration on Jan. 10 sanctioned more than 100 tankers and two Russian oil producers, leading to a scramble by top buyers China and India for prompt oil cargoes and a global rush for ship supply as dealers of Russian and Iranian oil sought unsanctioned tankers.
U.S. President Donald Trump has since laid out a sweeping plan to maximise oil and gas production, including declaring a national energy emergency to speed up permitting, rolling back environmental protections, and withdrawing the U.S. from the Paris climate pact.
Citi said the timing and nature of President Trump’s actions regarding Iran and Russia could be defining features of the oil market and pricing during 2025. It forecast a surplus of 0.8 million barrels per day for the year.
By Arunima Kumar
(Reuters) -Oil prices held steady on Wednesday, with traders closely watching President Donald Trump’s proposed tariffs and the potential impact of the national energy emergency he declared on his first day in office.
futures inched 4 cents higher, or 0.05%, to $79.33 per barrel at 1246 GMT. U.S. West Texas Intermediate crude futures edged 2 cents lower, or 0.03%, to $75.81.
“As more details emerge regarding energy production and trade agreements, traders will assess the balance between economic growth, energy security, and policy risks,” said Dilin Wu, research strategist at Pepperstone.
Trump said late on Tuesday that his administration was discussing imposing a 10% tariff on goods imported from China on Feb. 1, the same day that he previously said Mexico and Canada could face levies of around 25%.
He also vowed duties on European imports, without providing further detail.
“The oil market’s attention is slowly turning away from U.S. sanctions against Russia towards President Trump’s potential trade policy,” said ING analysts, adding that the energy complex has come under pressure with the growing threat of tariffs.
The U.S. president had said his administration would “probably” stop buying oil from Venezuela, among the top suppliers of oil to the country.
Trump laid out a sweeping plan to maximise domestic oil and gas production, including declaring a national energy emergency to speed permitting, rolling back environmental protections, and withdrawing the U.S. from the Paris climate pact.
Trump’s policy is unlikely to spur near-term energy investment or change U.S. production growth, analysts at Morgan Stanley (NYSE:) wrote in a note, adding that it could, however, moderate potential erosion of refined product demand.
Meanwhile, a rare winter storm churned across the U.S. Gulf Coast on Tuesday.
Elsewhere, North Dakota’s oil production was estimated to be down by between 130,000 and 160,000 barrels per day (bpd) due to extreme cold weather and related operational challenges, the state’s pipeline authority said on Tuesday.
By Enes Tunagur
LONDON (Reuters) – Oil prices fell on Tuesday as investors assessed U.S. President Donald Trump’s plans to apply new tariffs later than expected while boosting oil and gas production in the United States.
futures were down $1.42, or 1.77%, to $78.73 per barrel at 1116 GMT. U.S. West Texas Intermediate crude futures were down by $1.97, or 2.53%, at $75.91. There was no settlement in the U.S. market on Monday due to a public holiday.
Pressuring prices on Tuesday was a stronger U.S. dollar, as its strengthening makes oil more expensive for holders of other currencies.
“The current weakness is most probably Trump and dollar-related,” said PVM analyst Tamas Varga.
The dollar rebounded after Trump’s comments on imposing tariffs against Mexico and Canada, Varga added, noting that the dollar’s strength is negatively impacting oil prices.
Trump said he was thinking of imposing 25% tariffs on imports from Canada and Mexico from Feb. 1, rather than on his first day in office as previously promised.
“The initial sense of relief that trade measures weren’t an immediate focus on Trump’s ‘Day 1’ was quickly offset by reports of 25% tariffs on Mexico and Canada as early as February, which saw risk sentiments turn,” said Yeap Jun Rong, market strategist at IG.
Trump did not impose any sweeping new trade measures right after his inauguration on Monday, but told federal agencies to investigate unfair trade practices by other countries.
The U.S. president also said his administration would “probably” stop buying oil from Venezuela. The U.S. is the second-biggest buyer of Venezuelan oil after China.
Trump also promised to refill strategic reserves, a move that could be bullish for oil prices by boosting demand for oil.
Also weighing on prices on Tuesday was the potential end to the shipping disruption in the Red Sea. Yemen’s Houthis on Monday said they will limit their attacks on commercial vessels to Israel-linked ships provided the Gaza ceasefire is fully implemented.
“Reopening of the Suez Canal will create a short-term abundance of supply given the shorter journey times, and that may also weigh on prices in the short term,” said Saxo Bank analyst Ole Hansen.
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