Jannah Theme License is not validated, Go to the theme options page to validate the license, You need a single license for each domain name.

Oil Higher as Traders Focus on China; Natural gas prices hit their lowest since April 2021

Oil futures rose on Wednesday, with investors and analysts fixated on prospects for a recovery in demand for crude oil from China after the country lifted the COVID curbs that were seen reducing consumption from one of the world’s largest energy importers.

Natural gas futures, meanwhile, extended January’s slump.

Price action
  • West Texas Intermediate crude oil for March delivery CL.1, +1.68% CL00, +1.68% CLH23, +1.68% was up $1.05, or 1.3%, to $ 81.20 per barrel on the New York Mercantile Exchange.

  • March BRNH23 Brent crude, +1.70%, the global benchmark, rose $1.24, or 1.4%, to $87.36 a barrel on ICE Futures Europe. April Brent BRN00, +1.65% BRNJ23, +1.65%, the most actively traded contract, gained $1.11, or 1.3%, to trade at $87.30 a barrel .

  • Returning to the Nymex, February RBG23 Gasoline, up 1.19%, added 2% to $2.6458 a gallon, while February HOG23 Heating Oil, up 1.59%, was up 1. 6% to $3.4151 a gallon.

  • February NGG23 natural gas, -6.16%, fell 6.9% to $2.857 per million British thermal units before Friday’s deadline. March NGH23 natural gas, -3.40%, the most actively traded contract, fell 4.7% to $2.777 per million BTU. Based on the most actively traded contract, natural gas was on track for a nearly 9% weekly decline and is down more than 32% so far in January.

Market drivers

Oil prices stumbled at the start of the year but recovered, with WTI back in positive territory for the month, on optimism over the outlook for crude demand from China.

The rebound “coincided with a significant fundamental shift in the global macroeconomic landscape that should sow the seeds for further oil price appreciation from here, as bullish reopening expectations continue to rest on the premise that Chinese demand is nowhere near reflected in the current market”. prices, especially if international travel continues to open up,” Stephen Innes, managing partner at SPI Asset Management, said in a statement.

The OPEC+ Joint Ministerial Monitoring Committee (JMMC), which monitors the oil market, is scheduled to meet on February 1 and is not expected to change the group’s production quota, StoneX’s Kansas City energy team wrote in the Thursday newsletter.

“This is widely considered a bullish expectation considering China’s reopening adds more demand for crude oil,” they said.

The next full meeting of members of the Organization of the Petroleum Exporting Countries and their allies is scheduled for June.

Natural gas, meanwhile, has plunged and could stabilize at its lowest since April 2021 amid unusually warm weather in the United States and much of the Northern Hemisphere. This helped Europe replenish natural gas supplies, averting a winter heating crisis that had been widely feared due to the Russian invasion of Ukraine.

The US Energy Information Administration reported Thursday that domestic natural gas supplies fell by 91 billion cubic feet for the week ending Jan. 20. That compares with an average analyst forecast for a decline of 84 billion cubic feet, according to a survey conducted by S&P Global Commodity Insights.

However, total inventories of working gas in storage stand at 2.729 trillion cubic feet, up 107 billion cubic feet from a year ago and 128 billion cubic feet above the five-year average, the government said. The five-year average drawdown is 185 bcf, according to S&P Global Commodity Insights.

Content Source

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button