Oil prices rose during trading today, Thursday, December 14 (2023), continuing to reap gains for the second session in a row, supported by the decline in US inventories and optimistic demand expectations.
Official data showed that US oil inventories fell by 4.3 million barrels during the week ending December 8, 2023, bringing the total to 440.8 million barrels.
Oil markets received encouraging expectations for demand after the US Federal Reserve sent signals about increased demand and lower borrowing costs in 2024.
Oil prices ended their trading yesterday, Wednesday, December 13, with an increase of more than 1%, supported by concerns about the security of supplies in the Middle East after an attack on a tanker in the Red Sea.
Oil prices today
By 06:53 AM GMT (10:53 AM Mecca time), benchmark Brent crude futures, for February 2024 delivery, rose 0.55%, to $74.67 per barrel.
At the same time, US West Texas Intermediate crude futures, for delivery in January 2024, increased by 0.43%, reaching $69.77 per barrel, according to figures monitored by the specialized energy platform.
Oil prices have fallen by about 10% since the OPEC+ alliance meeting at the end of November, reaching their lowest levels in 6 months during last Tuesday’s trading.
A report issued by the Swiss investment bank UBS predicted that oil prices are likely to remain volatile in the near term, before rising in 2024.
An oil storage site in Japan – Photo from Reuters
Oil price analysis
“Crude oil prices rebounded ahead of the Fed meeting, and this event lifted them further,” said CMC Markets analyst Tina Teng.
Lower interest rates reduce consumer borrowing costs, which can boost economic growth and oil demand.
The news also caused the dollar to fall for the third session in a row from its lowest level in 4 months, making oil less expensive for foreign buyers.
Teng added that oil prices received support from a larger-than-expected withdrawal from US oil inventories, the agency reported Reuters.
The US Energy Information Administration said that energy companies withdrew a larger than expected amount of 4.3 million barrels of crude oil from their stocks during the week ending December 8, as imports decreased.
The dissipation of concerns about demand growth also supported the market, after the Organization of the Petroleum Exporting Countries (OPEC) attributed the recent decline in crude oil prices to “exaggerated fears.”
At the same time, some analysts warned that fuel inventories rose during the week in the United States, which indicates a decline in demand in the winter, saying that this limited the overall upside of the market.
“It’s not all good news, with gasoline and distillate stocks rising,” ANZ analysts Brian Martin and Daniel Haynes said in a client note.
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2023-12-14 07:20:49
#Oil #prices #rise…and #Brent #crude #Energy
