The week ends with oil prices up 7-8%. What is driving oil prices up today?
What is driving oil prices up today? Oil prices have rebounded after an initial decline during the day and are ending the week with a strong increase, Thanks to signals of increased demand in China.
March Brent crude futures on London’s ICE Futures exchange traded at $84.83 per barrel, up $0.8 (0.95%) from the close of the previous session.
The price of WTI futures for February crude oil grew by that time by $0.78 per barrel to $79.17 per barrel on NYMEX electronic trading.
Why are oil prices up today?
Oil prices may rise by 7-8% over a week. The PRC authorities have significantly increased oil import quotas for local companies, which indicates an expected increase in refinery output.
Investor optimism about the U.S. economic outlook provides additional support to the market, notes Bloomberg. Statistics data published the day before showed a slowdown in inflation in the U.S., which reinforced expectations of the imminent end of the cycle to increase the basic interest rate in the country.
Consumer prices (CPI) in the U.S. in December rose by 6.5% compared to the same month last year, said Thursday the Labor Department. Thus, inflation slowed from 7.1% in November, the lowest since October 2021. Consumer prices fell 0.1% from the previous month, the first month-on-month decline since 2020.
Earlier, we reported that ConocoPhillips is negotiating to import Venezuelan oil to the US.
Crude oil rebounds, helped by denial of Iranian nuclear deal
Oil prices edged higher Friday, rebounding after the previous session’s sharp losses after the White House denied a report that a nuclear deal between the U.S. and Iran was in the offering.
U.S. crude futures traded 0.3% higher at $71.50 a barrel, while the Brent contract rose 0.3% to $76.18 a barrel.
Both benchmarks had broken key support levels on Thursday–$70 in the case of the U.S. contract and $75 for Brent– after a report appeared on the Middle East Eye website of an interim deal that would allow the Islamic republic to legally export some of its sanctioned oil, increasing global supply.
This was subsequently refuted by U.S. authorities, with a spokesperson for the White House National Security Council calling the report “false and misleading.”
This has helped the market rebound Friday, along with weakness in the U.S. dollar as expectations of the Federal Reserve pausing its year-long rate-hiking cycle next week have grown.
A weaker buck makes commodities, including oil, which are denominated in dollars, cheaper for foreign buyers, boosting demand.
Oil prices had also risen early in the week, buoyed by Saudi Arabia’s pledge over the weekend to cut output
However, gains have been minimal Friday as remain concerned about the worsening outlook for consumption.
Data released earlier Friday showed Chinese producer inflation fell at its sharpest pace in seven years, adding to a string of weak numbers which suggested that the largest crude importer in the world was struggling to recover from its COVID hit.
Numbers out of Europe showed that the eurozone fell into recession during the first three months of the year, while the number of Americans filing new claims for unemployment benefits surged to the highest in more than 1½ years last week.
Rounding off the week, data from Baker Hughes detailing the number of U.S. oil rigs in operation will be studied for clues on future supply levels, while positioning data from the CFTC are also scheduled for later in the session.
Alberta Premier Smith starts new term, vows financial relief, Trudeau pushback
Danielle Smith swore in as the premier of Canada’s main oil-producing province on Friday, promising financial support measures, tax cuts and a pledge to push back against federal climate policies she says would harm the region’s fossil fuel industry.
Smith secured her first election victory as United Conservative Party leader last month, defeating the left-leaning New Democratic Party to return to power for another four-year term with 49 seats in Alberta’s 87-seat legislature.
The victory signaled a further rightward shift in the traditionally conservative province and put the populist premier on a collision course with Liberal Prime Minister Justin Trudeau over climate goals.
“Today marks the start of an exciting future,” Smith said at a swearing-in ceremony in Edmonton, after unveiling her new cabinet. “Over the next four years, we will improve on the affordability measures we already have in place such as fuel tax relief and electricity and natural gas rebates.”
Smith also repeated her claim that Trudeau’s climate policies will destroy tens of thousands of jobs in the oil and gas sector, which contributes more than 20% to Alberta’s annual Gross Domestic Product.
Trudeau’s government is aiming to cut climate-warming carbon emissions 40-45% by 2030, but will struggle to meet that target without significant reductions from Alberta, Canada’s highest-polluting province.
“We will vigorously and firmly defend our province from disastrous federal policies that would devastate tens of thousands of hardworking families,” Smith said.
VTB to sell one of Russia’s biggest grain traders, Demetra-Holding, CEO Kostin says
VTB, Russia’s second largest bank, will sell its stake in one of Russia’s biggest grain traders, Demetra-Holding, and is in negotiations with both Russian and foreign buyers, CEO Andrei Kostin told Reuters in an interview.
Demetra has a network of grain elevators, major deep sea grain terminals and its own logistics. It owns a non controlling stake in major grain trader United Grain Company (OZK).
VTB has a 45% stake in the holding.
“We’re coming out of there. It’s decided,” Kostin told Reuters. “We have been out of control for a long time, and we will leave completely.”
He said the asset would be sold this year.
When asked if buyers had been found, he said: “Yes, and even, maybe, there will be not only Russian ones, we’ll see.”
He declined to say who the buyers were but clarified that they would be from “friendly” countries – a word Russia uses to describe countries which have not imposed sanctions on Russia.
When asked if billionaire Vadim Moshkovich was a bidder, Kostin said: “No.”
Asked if it could be the Chinese, Kostin said: “Why China? We have lots of friends, more than 100 countries did not support the anti-Russian sanctions, so we will choose one of them.”
Kostin said VTB saw few prospects for itself in the grain business, adding that a sanctioned bank in the shareholding hindered the holding.
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