2023-04-28 21:37:07
Driven by expectations of tighter supply, crude oil futures prices closed sharply higher on Friday (28th). WTI Crude OilFutures prices turned higher.
In addition, market speculation that the troubled First Republic Bank may be rescued also provided price support. Previously, the market worried about the banking industry’s problems to suppress the economic outlook, which in turn weakened the outlook for energy demand.
energy commodity prices
- West Texas Intermediate (WTI) crude futures for June delivery rose $2.02, or 2.7%, to settle at $76.78 a barrel. WTI front-month futures prices fell 1.4% this week, but rose 1.5% this month, after five consecutive months of decline, the monthly line finally rose.
- June delivery Brent Crude OilFutures rose $1.17, or 1.5%, to settle at $79.54 a barrel, down 0.3% for the month. The futures closed for expiration today.
- July delivery Brent Crude OilFutures rose $2.11, or 2.7%, to settle at $80.33 a barrel, the most actively traded Brent Crude Oilfutures.
- Gasoline futures for May delivery rose 1.8% to close at $2.58 a gallon, down 4.5% on a monthly basis. The futures closed for expiration today.
- delivered in MayHot Fuel FuturesPrices rose 1% to close at $2.38 a gallon, down more than 11% across the line, and the futures closed for expiration today.
- Natural gas futures for June delivery rose 2.3% to settle at $2.41 per million Btu, up nearly 8.8% for the month.
market drivers
Phil Flynn, senior market analyst at Price Futures Group, said the monthly report from the U.S. Energy Information Administration (EIA) showed that U.S. oil demand reached its highest level since November 2022, while production fell to its lowest level since December 2022. This gave the oil market support.
Flynn said the Exxon CEO also reportedly expects higher oil prices and gasoline demand looks reasonable, so “the weak demand narrative doesn’t hold up” in today’s trading, Flynn said.
In other news, First Republic Bank is expected to be bailed out. The previously troubled First Republic Bank was one of the reasons for oil’s weakness. If that happens, it would reduce the chances of a rate hike by the U.S. Federal Reserve a little more, which should support oil prices, Flynn said.
After OPEC+ unexpectedly announced production cuts earlier this month, sparking a rebound in crude oil, there was a gap left on the daily price chart, but crude oil futures prices have filled the gap this week.
Barbara Lambrecht, a commodity analyst at Commerzbank, said in a report that although OPEC+ will start to cut production by 1.16 million barrels per day starting next week, it is “unlikely to push prices up again immediately.”
“After all, Russia’s oil export figures remain high, raising doubts that Russia has cut production as promised so far. On the other hand, concerns over demand may remain, given US-China sentiment indicators.”
Naeem Aslam, chief investment officer of Zaye Capital Markets, pointed out that the weaker-than-expected U.S. GDP data and the possibility of further interest rate hikes at the Fed meeting next week “mean that economic growth will slow further.” Even so, traders who believe that oil prices will fall must be very careful , because OPEC will not let oil prices crash again.
In the bigger picture, oil prices fell from the low $80s in March to the low $70s in March due to the banking crisis, sparking concern over the market, said Jay Hatfield, chief executive of Infrastructure Capital Management. Global growth concerns. Oil prices then recovered to the $80 range in April, largely due to the unexpected production cuts announced by OPEC+ in early April.
Infrastructure Capital Management expects oil to trade between $75 and $95 a barrel this year, as oil is underpinned by “China’s reopening, stronger travel demand driven by lower prices, and continued production curbs by OPEC+.”
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