by Martin Abbott on May 23, 2024

Oil Prices Rebound After Three-Day Slump but Remain Set for Weekly Loss

Crude oil futures are after suffering a three day decline slightly recovers on Thursday. Still, the gains were not enough to help the overall position of a week and that is why the majority of the stock markets were still in red. U.S crude oil has decreased by 2 percent and the outlook remains uncertain due to numerous factors such as weather conditions, global conflicts, and economic instabilities among other factors. 4% since the beginning on the week, in contrast, the Brent crude oil, the international standard, shed by 1. 8%.

Current Energy Prices

As of today, here are the prices for various energy commodities: As of today, here are the prices for various energy commodities:

West Texas Intermediate (WTI)

The crude oil WTI reference price for the July contract is at $78 per barrel. 04 per barrel, an increase of 47 cents, or 0.The change in BBL and daily prices of light and sweet crude are shown in table 10. 6% % U. S. Crude oil has risen by 8% in the year to date Figure 2 presents the historical chart of Brent and U. 9%.

Brent Crude

The price of the July agreement of Brent crude is $82. 40 per barrel, therefore an increased of 50 cents or 0. 6%. So on average for the year till date, the global benchmark has gone up slightly over 7%.

RBOB Gasoline

RBOB gasoline is found under the June contract, costing $2. to $ 2.49 per gallon, which is 0.1 percent increase more than the previous week. 1% increase. Cumulatively, gasoline futures have risen by 18 dollars per barrel for the year so far, while Brent crude has gained 13 dollars per barrel for the same period. 6%.

Natural Gas

He also predicted the future prices of futures contracts where the June natural gas contract is trading at $2. Subsequently, with rising production costs and decreasing revenue, Dominion raised the price of its natural gas from $ 79 per thousand cubic feet. The price of natural gas rose to 3.11 US$ per MMBtu in January 2019, it has risen by 11 percent from the beginning of the year. 3%.

Oil prices have independently been showing a rather moderate fluctuation, fluctuating within approximately $3 since the prices attained their highest levels in April. Crude oil futures have stabilized as traders’ political concerns regarding a war in the Middle East expand to more limited, thus, turning their attention to the fundamental factors of supply and demand. Nonetheless, the general price trends have failed to o through the roof as was the case this month.

UBS’s commodity analyst, Giovanni Staunovo pointed out that investors remained guarded over high inflation rates fearing that high interest rates for longer period can slow down the U.S. economy, thus, dampening oil demand. Specifically, the traders are worried that global oil stocks may soar in the coming months as the northern hemisphere warmed earlier than usual during the winter season as emphasized by Staunovo in a note to the clients on Thursday.

However, as mentioned, at present, the representatives of UBS are rather optimistic about further trends in the oil market. The bank explicitly forecasts the global supply/demand gap to grow and project that Brent crude may average $91 per barrel in the subsequent months. Furthermore, based on UBS research, there are ongoing expectations on demand growth, with UBS anticipating a rise of 1. 7 percent per year and it predicts oil demand at 5 million barrels per day in 2024, a relatively higher figure than the average annual increase. The IPI states that the number of barrels of oil produced and consumed daily is approximately 2 million barrels of oil per day.

Market Dynamics and Future Projections

There are numerous factors that affect the current dynamic observed on the global oil market. These tensions have also prevented the market fundamentals such as supply and demand from playing their natural course after the shift in geopolitical risk sentiment in the Middle East. However, there is still a downward perspective due to the necessity to focus on certain economic factors, namely the rates of interest.

People have herd fears when it comes to high interest rates and how long it will sustain in the economy. One major risk that the market needs to prepare for is that any weakening or slow pace economic growth in the USA may affect its consumption of oil. Also, the new world’s mild winter intensified the overproduction of oil and added some extra problems to the supply-demand plane.

However, the positive outlook adopted by UBS implies a voter confidence in the oil market evoking a sense of stability. Bank has predicted the market shortage and an increase in the price of Brent, and this is the primary reason they believe there is strong demand for oil. There is a projected increase in demand of 1.Assertion 1. 5 mn b/d in 2024 implies expectation of sustained growth and continued consumption rate.

In conclusion, the analysed futures prices of crude oil have somewhat recovered from the recent drop and thus the market is expected to be negative this week. This includes geopolitical strategies and action, the economic status and freedom, and issues relating to inventory that still defines the market. On the other hand, while concerns with current the rates of demand growth and escalation of price levels are valid, long-term prospects look equally rosy when it comes to the oil market.

By Martin Abbott

Martin has been a Trader for 5 years now. He has experience in trading Forex, stocks, and cryptocurrencies. His insight on news and brokers has been refining for the past 3 years. His close connection to the markets enables him to write amazing copy for all of his readers.

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