Oil Prices Rebound After Key Vote in Congress: Updates & Analysis

2023-06-02 08:28:10

Zurich: Oil prices continued their rebound on Friday, after the key vote in Congress in favor of a resolution of the impasse on the debt ceiling in the United States and despite a rise in weekly American inventories. Still, the black gold should end the week in the red.

Friday around 07:35, the barrel of Brent BRENT Brent or North Sea crude is a variation of crude oil serving as a benchmark in Europe, listed on the InterContinentalExchange (ICE), a stock exchange specializing in energy trading. It has become the first international standard for setting oil prices. from the North Sea, for delivery in August, was worth 74,75 dollarsrising 0,65%. The night before he had reached 74,28 dollarsthanks to a leap of 2,31%. The 159 liters of the American equivalent, the West Texas Intermediate (WTI WTI West Texas Intermediate (WTI), also known as Texas Light Sweet, is a variation of crude oil that serves as a standard in pricing crude oil and as a commodity for oil futures contracts with the Nymex (New York Mercantile Exchange). ), the stock exchange specializing in energy.) for delivery in July, were taking 0,64% To 70,54 dollarsafter winning close to 3% Thursday evening at 70,10 dollars.

“Oil prices rose early in the day on Thursday, changing the game“compared to the sessions at the beginning of the week, during which the WTI WTI West Texas Intermediate (WTI), also known as Texas Light Sweet, is a variation of crude oil that serves as a standard in pricing crude oil and as a commodity for oil futures contracts with the Nymex (New York Mercantile Exchange). ), the stock exchange specializing in energy. and the Brent BRENT Brent or North Sea crude is a variation of crude oil serving as a benchmark in Europe, listed on the InterContinentalExchange (ICE), a stock exchange specializing in energy trading. It has become the first international standard for setting oil prices. have unscrewed approximately 7%, commented Ricardo Evangelista, analyst at ActivTrades, interviewed by AFP. According to the expert, the increase reflects “the return of optimism on the markets, following the adoption by Congress of the law on the ceiling of the American debt“.

The elected representatives of the House of Representatives adopted on Wednesday by a very large majority the text aimed at raising the debt ceiling. The bill must now be passed by the Senate. So far the market”discounted in the prices the possibility of non-payment. Now that’s unlikely, brokers are returning to the market“, summed up Phil Flynn of Prices Futures Group.

Prices remained on an upward trend despite the publication of an unexpected increase in weekly US commercial inventories by the US Energy Information Agency (EIA). These reserves increased by 4.5 million barrels while analysts saw them fall by 1.5 million.

However, as Phil Flynn points out, average demand for crude, but also for gasoline and kerosene, over four weeks in the United States – an indicator closely followed by operators – remained above that of last year. last at the same time. “The supply is therefore really tight and the demand is holding up well.“, which is favorable to the rebound in prices, added the analyst from Price Futures Group.

Another major event for the oil markets, the Organization of Petroleum Exporting Countries and their allies (OPEC+) are meeting on Sunday in Vienna, the headquarters of the alliance, for a possible adjustment of their level of production. While analysts are leaning towards a wait-and-see approach with the current level maintained, the likelihood of a tightening increases however as prices fall.

⤵ Gas prices down

On the natural gas side, the Dutch TTF futures contract, considered the European benchmark, fell again on Thursday to 23,10 euros the megawatt-hour (MWh), a level not seen for nearly two years. In the space of a week, it fell from 9,23% and of 38,44% over a month. In annual comparison, the fall even reaches 72,48%.

Gas prices in Europe are showing a downward trend in the face of an abundant supply of liquefied natural gas (LNG), a reduction in consumption, mild weather conditions, higher production of renewable energy as well as a moderate demand in from Asia, according to observers. Moreover, the economy of the Old Continent is showing signs of weakness, with Germany having fallen into recession in the first quarter of 2023, which raises additional concerns about a potential drop in demand for natural gas.