© Reuters.
Investing.com – Oil prices extended their morning gains Thursday after rising about 1% in the morning, and are now close to 2.5% after posting their worst start to a new year in 30 years.
In the first sessions of the new year 2023, prices lost almost 10% of their value, approaching pre-Ukrainian-Russian war levels, during Tuesday and Wednesday sessions this week.
This comes as markets await the Energy Information Administration’s data on oil inventories, to be released today, Thursday, amid expectations that the stock will rise by 1.15 million barrels.
Update at 7am Riyadh time.
Data on US inventories has now come out and they have risen more than expected, adding to the pain of markets, which are off to their worst start in more than 30 years.
US oil inventories rose to 1.69 million barrels, according to data from the US Energy Administration, versus expectations for a rise of 1.15 million barrels, and versus the previous reading, which registered an increase of about 0.718 million barrels.
According to data from the US Energy Information Administration, US oil inventories increased in the last week of December 2022 to levels of 420.6 million barrels.
In contrast, U.S. gasoline inventories fell more than expected, posting a drop of 0.346 million barrels, versus expectations for a drop of 0.486 million barrels, while posting a decline over the past week, on the order of 3.105 million barrels.
Prior to the release of the inventory data, oil prices were up over 2.5% for Nymex crude and in the 2.3% range for Brent crude, and are now climbing in the 1.2% range for both flocks.
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oil now
The American light crude Nymex rose in these moments of today’s trading by 2.5%, reaching levels close to 74.5 per barrel, with an increase of about 1.72 dollars per barrel.
While the benchmark price moved up in the 2% range to levels near $80 a barrel, an increase of more than $1.7 a barrel during these trading moments on Thursday.
Petroleum Institute
A recent survey revealed that US crude oil inventories are likely to have increased by 2.2 million barrels, while distillate inventories are expected to decline.
Data from the American Petroleum Institute revealed that crude inventories rose by 3.3 million barrels in the week ending Dec. 30.
According to data from the American Institute, gasoline inventories increased by 1.2 million barrels, while distillate inventories decreased by 2.4 million barrels.
what happened?
The price of a barrel of oil fell more than 5% at the close of trading on Wednesday for the second consecutive day amid fears of a drop in demand and the spread of coronavirus infections in China.
This stems from rising coronavirus cases in China, the world’s largest importer of oil, and fears of an economic downturn in several major economies.
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The worst since January 1993
The price of benchmark Brent crude oil fell by close of trading on Wednesday by about 5.2% to $77.84 a barrel, and US West Texas crude fell 5.3% , at $72.84 a barrel, its lowest level since December 9, 2022.
Crude oil prices closed trading the day before yesterday, Tuesday, down more than 4%, amid volatile transactions, amid renewed recession fears, weak demand from China.
On the other hand, U.S. crude is up 6.7% in 2022, after gaining 55% in the last year 2022.
price prediction
UBS analysts have indicated that prices should rise; Slow down the growth of oil demand and encourage investment in new production activities in the sector.
The bank’s analysts were expecting oil prices to exceed $100 a barrel in the coming months, with Brent crude trading at $110 a barrel in mid-2023, while WTI prices will reach $107 a barrel.
Middle East oil market analyst at Argos platform Nadir Etim said central bank tightening operations to counter inflation, macroeconomic headwinds and fears of recession are all factors influencing the price decline of the barrel of oil globally.
Nader Etim added that there was still a state of uncertainty about the impact of the EU-imposed embargo on oil and oil derivatives, and what OPEC+ might decide next.
