World oil prices have fallen to the level of early January, as expectations of a sharp decline in oil supplies from Russia after the start of the embargo and more aggressive actions by OPEC+ to maintain prices have not materialized. This is the reason for the crude oil price chart dump.
Live crude oil price in dollars – what’s going on?
On Wednesday, Brent crude oil prices fell below $78 a barrel for the first time since January 3. February futures are trading at $79.6 a barrel.
Prices were probably driven by expectations of a sharp drop in oil supplies from Russia due to the embargo, and more aggressive action by OPEC+ to maintain prices; i.e., production cuts. Neither of these things happened; OPEC+ decided on Sunday not to change its production quota and, judging by media reports, Russian companies prepared for the embargo, including tanker fleet acquisitions.
Meanwhile, the Financial Times newspaper reported on Monday, citing oil traders, intermediaries and vessel-tracking services, that a traffic jam of oil tankers has formed off the Turkish coast since the start of restrictions on oil prices from Russia due to Ankara’s requirements to provide insurance data. According to the expert, a delay in the passage of ships could have led to an increase in oil prices on expectations of a shortage, but this has not happened yet.
According to marinetraffic, a ship-tracking portal, there are about 30 tankers, mostly Turkish, off the Turkish coast near the strait. Five tankers out of this number are Russian. Russia is concerned about the situation off the coast of Turkey, where Russian oil tankers have piled up; this problem is now being discussed through transport and insurance companies. but it may also be taken up at a political level.
Western oil sanctions came into effect on December 5: The European Union stopped accepting Russian oil transported by, and so also the “Big Seven” countries. Australia and the EU, imposed a price cap on such oil at $60 per barrel. Deputy Prime Minister Alexander Novak said Sunday that Russia is considering possible mechanisms to ban the application of the price ceiling for Russian oil supplies.
Earlier, we reported that oil prices fell before the release of statistics on inventories in the U.S.
Oil prices continue to decline, with Brent falling below $82 a barrel. Will oil prices go down even more?
Oil prices continued to decline on Friday, finishing in the red for the second week in a row, amid some weakening optimism of traders about demand prospects in China and continuing growth of inventories in the U.S. Will oil prices go down even more?
Oil has been trading in a range of around $10/bbl since early this year. On the one hand, the market is waiting for an increase in demand in China after the lifting of quarantine restrictions in the country. on the other hand — it fears a decline in activity in developed countries due to the continuing increase in interest rates by leading global central banks, said Bloomberg.
Also, starting next week the EU embargo on Russian oil products, accompanied by the initiative of the price ceiling, and traders will wait for the consequences of this decision.
“Will crude oil prices go down? The oil market is in limbo, waiting for tangible signs of increased demand in China,” notes Vanda Insights founder Vandana Hari. — The factor of the Russian oil products supply ban in the EU is not the main one, but it still creates some uncertainty.”
The value of April futures for Brent oil at London’s ICE Futures Exchange on Friday is $81.97 per barrel, which is $0.20 (0.24%) lower than at the close of the previous session. At the close of trading on Thursday, those contracts had fallen by $0.67 (0.8%) to $82.17 per barrel.
The price of WTI futures for March crude oil at electronic trades on the NYMEX fell by $0.19 (0.25%) to $75.69 per barrel by that time. By the close of previous trading these contracts went down by $0.53 (0.7%) to $75.88 per barrel.
Earlier we were informed that world demand for gold grew last year by 18% and reached an 11-year maximum.
Global demand for gold rose by 18% last year to an 11-year high
Global demand for gold in 2022 increased by 18% to 4,741 thousand tons, the highest since 2011, according to the annual report of the World Gold Council (WGC).
Purchases of gold by central banks of the world grew for the second consecutive year and reached 1,136 thousand tons. Regulators from developing countries, including Turkey and China, were the main buyers of gold.
“In 2022, central banks not only became net buyers of gold for the 13th consecutive year, but also purchased the second largest volume of the precious metal in the history of observation since 1950,” the paper noted.
Global market for gold
Investment demand for gold increased by 10% and reached 1,107 thousand tons. Including purchases of bars and coins increased by 2% – to 1.217 thousand tons, and outflows from gold-backed ETFs amounted to 110 tons, which corresponds to cash outflows of about $3 billion.
Gold use in the technology sector fell by 7% in 2022 due to lower demand for consumer electronics and totaled 309 tons. Annual gold demand from jewelry companies decreased 3% to 2,086 thousand tons.
Meanwhile, total gold supply in 2022 increased by 2% to 4,755 thousand tons. This included a 1% increase in gold production to a four-year high of 3,612 thousand tons.
WGC keeps a positive outlook for gold in 2023 amid continuing weak dollar, growing risks of recession and increased geopolitical risks.
Demand from central banks is more difficult to predict, but given the overall reduction in reserves, we can expect that purchases of precious metals by central banks around the world will be more moderate this year than last year, according to the report.
Earlier we reported that Oil continues to lose value little by little
Oil continues to lose a little in price. Why is oil getting cheaper?
Oil prices continued to decline slightly on Monday afternoon as investors assessed news from Iran and promises by PRC authorities to stimulate demand. March futures on Brent crude oil fell by $0.09 (0.1%) to $86.57 per barrel at the ICE Futures exchange in London. Why is oil getting cheaper?
Is crude oil getting cheaper? WTI futures quotes for March fell by $0.05 per barrel to $79.63 per barrel at NYMEX by the indicated time. Brent dropped 1.1% and WTI gained 2.4% at the end of the previous week.
On Saturday evening, drones attacked a military-industrial facility in Iran’s Isfahan. The origin of the drones is unknown, but many media outlets believe Israel launched the attack. The government of the Jewish state refrained from commenting.
“It is unclear what exactly is going on in Iran, but any escalation in the region threatens the risks of supply disruption,” said Stefano Grasso, a senior portfolio manager at 8VantEdge.
The main event for the oil market this week will be the February 1 meeting of OPEC+ ministers. According to most experts, the coalition will not change production quotas after this meeting.
Also, the Chinese authorities on Saturday promised to support the restoration of fuel demand in the country, as it is the main engine of the economy and imports, notes MarketWatch. At the same time, a ban on imports of Russian petroleum products to the EU goes into effect on Feb. 5.
“We are evaluating Russian supplies on the one hand and Chinese demand on the other,” Grasso noted. – Both could fluctuate by more than 1 million barrels per day in either direction.”
Earlier we reported that the media named the consequences of the EU embargo on Russian oil products.
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