Ana sayfa » Oil prices decline as supply outlook strengthens

Oil prices decline as supply outlook strengthens

If Russian supply remains strong until next month, oil will likely continue its downward trend

by BUNKERIST

Oil prices fell on Friday, making their weekly finish flat to lower as strong Russian oil supply offset better-than-expected US economic growth data, strong mid-distillate refinery margins and hopes for a quick recovery in Chinese demand.

Brent futures were down 81 cents, or 0.9%, at $86.66 a barrel, up just 3 cents from last week’s deal. WTI crude was down $1.33, or 1.6%, to settle at $79.68, down 2% from the week.

According to traders, oil shipments from Russia’s Baltic ports will increase by 50% this month compared to December as sellers try to meet strong demand in Asia and take advantage of rising global energy prices. Urals and KEBCO crude oil shipments from Ust-Luga between 1-10 February may increase to 1.0 million tons, from the planned 0.9 million for the same period of January.

If Russian supply remains strong until next month, oil will likely continue its downward trend. Having a profit before the weekend may also contributed to the decrease in prices.

U.S. energy firms held oil and gas rigs steady at 771 this week, energy services firm Baker Hughes’ closely-watched report showed on Friday.

Meanwhile, OPEC+ delegates will meet next week to review crude oil production levels, but oil producer group sources do not expect any change in current production policy.

The US Federal Reserve’s next interest rate decision will be made at its meeting on January 31 and February 1, amid faster-than-expected inflation of 2.9% in the fourth quarter and a decline in gross domestic product.

Critical COVID-19 cases in China have dropped 72% from their peak earlier this month, and daily deaths from COVID-19 patients in hospitals have dropped 79% from their peak, pointing to the normalization of the Chinese economy and raising expectations.