Low temperatures in the northern hemisphere increase demand for heating, but there are concerns about a shortage of Brent crude.
The oil prices were largely unchanged early Thursday as investors weighed firm winter fuel demand expectations against large fuel inventories in USA and macroeconomic concerns.
Brent crude futures were down 3 cents at $76.13 a barrel; while those of crude oil West Texas Intermediate (WTI) of the United States fell 10 cents to 73.22 dollars. Both benchmarks fell more than 1% on Wednesday, as a dollar stronger than expected increase in American fuel stockpiles pressured prices.
“He oil market “is still dealing with opposing forces: seasonal demand supporting the bulls and macroeconomic data supporting a stronger US dollar in the medium term that may put a ceiling that prevents the bulls from advancing further,” he told Reuters. Kelvin Wong, senior market analyst OANDA.
The analysts of JPMorgan they hope that the oil demand by January to expand by 1.4 million barrels per day (bpd) year-on-year to 101.4 million bpd, driven mainly by greater use of heating fuels in the northern hemisphere. “Global oil demand is expected to remain strong throughout January, driven by colder-than-normal winter conditions that are boosting heating oil consumption, as well as an earlier start to tourism activities in China for the holidays Lunar New Year“said the analysts.
Meanwhile, the structure of the Brent futures market also indicates that traders are increasingly concerned about the supply shortage at the same time as demand increases.
On Wednesday, the premium of the one-month Brent contract over the six-month contract reached its highest level since August. An extension of this trend backwards, when futures for immediate delivery are higher than for later delivery, generally indicates that supply is decreasing or demand is increasing. However, official data from the Energy Information Administration (EIA) showed that gasoline and distillate reserves in the United States increased last week.
Looking ahead, WTI crude oil is expected to fluctuate within a range of $67.55 to $77.95 in February as the market awaits more clarity on U.S. policy. trump administration and new fiscal stimulus measures from China, said OANDA’s Wong.
Meanwhile, crude oil supply Saudi Arabia to China will decline in February from the previous month, trade sources said on Thursday, after the kingdom increased its official sales prices to Asia for the first time in three months.
Source: Ambito
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