Crude oil closes: Concerns about the Palestinian-Israeli war dissipated, and the market focused on the demand outlook. Crude oil closed lower.
Financial World 2023-11-04 05:30:47
According to news from the financial world on November 4, as concerns about the expansion of the Israel-Hamas war subsided, investors refocused on the outlook for energy demand. Crude oil futures closed lower and recorded losses for two consecutive weeks.
According to Dow Jones Market Data, West Texas Intermediate crude oil futures for December delivery on the New York Mercantile Exchange fell $1.95 to close at $80.51 a barrel, a decrease of 2.4%. The contract price fell 5.9% this week. Global benchmark Brent crude oil futures for January fell $1.96 to $84.89 a barrel on ICE Futures Europe, a 2.3% drop and a weekly decline of 4.8%.
The price of gasoline fell 2% to $2.20 per gallon in December, a drop of 4.1% this week; the price of heating oil fell 3.4% to $2.92 per gallon, a drop of 1.5% this week. Natural gas futures for December delivery closed at $3.52 per million British thermal units, up 1.2% on the day and up 0.9% for the week.
“The energy sector will continue to be volatile,” said Tariq Zahir, managing member of Tyche Capital Advisors. “The key to the situation in the Middle East is that if Iran gets involved, chaos will start to occur in the Strait of Hormuz.” Oil hasn’t been the focus this week, with falling 10-year Treasury yields helping to lift stocks, but the energy sector will “take center stage” if we see other countries getting involved in the Israel-Hamas war.
Analysts continue to watch the war between Israel and Hamas for signs of possible contagion. Crude prices rose after the war began amid concerns that a wider conflict could lead to tougher U.S. sanctions on Iranian crude exports, and that a worst-case scenario could see Iran or its proxies threaten key transportation arteries and infrastructure in the region facility.
Stephen Innes, managing partner at SPI Asset Management, wrote in a note late Thursday that there is now a decline in the “bullish bias” in the oil market, which makes Oil has become cheaper, but it also suggests the market now believes “the likelihood of a broader shock is diminishing.” “However, even if the likelihood of the powder keg exploding across the Middle East is small, it is far too likely when religion is fueling this narrative.”
Overall, oil prices have fallen sharply this week, but they did see a brief rise on Thursday.
The StoneX Kansas City energy team led by Alex Hodes said in a report on Friday that the Federal Reserve announced another pause in interest rate hikes on Wednesday afternoon, leading the market to believe that the rate hike cycle is coming to an end. “One of the main factors the Fed has been watching is job growth data, which the Fed would like to see moderate as it would indicate the economy is slowing,” they said.
Data released earlier on Friday showed job growth slowed more than expected in October. The unemployment rate rose to 3.9% from 3.8% in September.
Craig Erlam, senior market analyst at OANDA, said in market commentary that weaker U.S. economic data may provide relief to Fed policymakers, but “it also puts pressure on crude oil because a weaker economy means weaker demand.”
Meanwhile, the U.S. Energy Information Administration is scheduled to release its monthly Short-Term Energy Outlook report on Tuesday. However, due to planned system upgrades, the weekly oil supply report and natural gas supply data will be delayed, with two weeks of data released on November 15 and November 16 respectively.
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2023-11-03 21:30:47
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