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Prices climbed to a seven-week high as supply constraints from OPEC+ to North America offset concerns about the impact of a Covid-19 outbreak in China. Futures in New York rose 2.1% to the highest closing price since Nov. 16th and traded above $80 a barrel during Friday’s session. A deep freeze in Canada and the northern U.S. is disrupting oil flows, boosting prices just as American stockpiles decline. Output from OPEC+ member Kazakhstan’s giant Tengiz oil field has been temporarily adjusted amid unrest in the Central Asian country. A growing premium for prompt barrels suggests that supply troubles across the OPEC+ coalition — which was able to provide only part of last month’s planned production increase — are delaying the onset of an anticipated oversupply in global markets.
Prices jumped more than 1% on the first trading day of the new year ahead of an OPEC+ meeting on Tuesday to discuss production policy. Futures in New York topped $76 a barrel after toggling between gains and losses earlier. Libyan output is expected to decline to the lowest level in more than a year as workers try and fix a damaged pipeline less than two weeks after militia shut down its biggest field.
The New York futures exchange was closed on Friday, while London futures slipped towards $76 a barrel in very light holiday trading. “If the news is confirmed that omicron is not as dangerous as earlier variants, that could end up being quite bullish for oil next year,” said the head of commodities research at Bank of America. “There’s a risk oil spikes next year.” Crude is heading for a yearly gain, but the rally has faltered, in part due to concerns about omicron. Nevertheless, there are some signs of tightening emerging, with supply disruptions in Libya and Nigeria.
Futures posted a weekly decline after a few volatile days that saw traders grow more concerned about the demand impact from the omicron variant and tighter monetary policy. New York futures fell 3.4% on Friday to close at $70.85 after briefly trading below $70 a barrel. Brent closed the week at $73.52. Daily Covid-19 cases in the UK jumped to a record, while hospitalizations surged across the US. Prices also weakened after the US dollar rose in response to impending steps by the Federal Reserve and other central banks to tame inflation.
Futures saw their biggest weekly gain in more than three months as the worst fears over the new virus strain have receded. Brent and WTI posted gains of about 8% this week, their first weekly gain in seven, even after a brief bout of profit-taking. Brent futures settled at $75.15 a barrel, after falling 1.9% on Thursday. WTI rose 73 cents, to $71.67 after sliding 2% in a volatile session the previous day.
Crude prices ended little changed on Friday after erasing earlier gains on growing worries that rising coronavirus cases and a new variant could reduce global oil demand. Earlier in the day, oil prices climbed more than $2 a barrel after OPEC+ said it could review its policy to hike output if a rising number of pandemic lockdowns chokes off demand. Brent futures settled at $69.88 a barrel, while West Texas Intermediate ended at $66.26. Both benchmarks declined for a sixth week in a row for the first time since November 2018.
The discovery of a new coronavirus variant named Omicron triggered global alarm on Friday as countries rushed to suspend travel from southern Africa, and the equity and commodity markets on both sides of the Atlantic suffered their most significant drop in more than a year. The World Health Organization said Omicron might spread more quickly than other forms of the virus, and preliminary evidence suggested an increased risk of reinfection.
Crude futures moved sharply lower on Friday as the markets weighed the impacts of new pandemic lockdowns in Europe and a stronger US dollar. WTI settled down $2.91 at $76.10, and Brent moved $2.35 lower to settle at $78.89. Oil demand in most major European economies continued to fall, as governments react to rising COVID-19 cases in most countries while supply chain disruptions continue to drag on activity.
Prices notched the longest stretch of weekly losses since March, with President Biden keeping investors guessing about whether he’ll act to tame higher energy prices that are driving a surge in inflation. Futures in New York fell 1% to close at $80.79 on Friday, and London closed at $82.17. Near the end of the session, White House Press Secretary Jen Psaki declined to say whether Biden plans to release oil from the Strategic Petroleum Reserve. Biden has been weighing moves that include an SPR release to bring down the cost of gasoline at the pump.
The OPEC+ group of major producers agreed on Thursday to stick to their plan to raise oil output by 400,000 b/d from December, ignoring calls from President Biden for extra output to cool rising prices. This decision led to a price rebound on Friday, leaving Brent crude finishing the week at $82.74 a barrel. US WTI closed at $81.27. Following the OPEC+ announcement US Energy Secretary Granholm said President Biden is considering a release from the US’s Strategic Petroleum Reserve (SPR) as a possible move to reduce gasoline prices in the US. The SPR is the world’s largest supply of emergency crude oil and it currently holds around 600 million barrels.
Futures rose above $84 a barrel on Friday, within sight of a multi-year high hit last week. Expectations that OPEC and its allies will keep supply tight countered a weekly rise in US inventories and the prospect of more Iranian exports. Oil posted a monthly gain for October of 11% on signs that consumption is outpacing supply and declining stockpiles. New York futures closed at $83.57 and London at $83.72. Last month’s advance shows the impact of an ongoing shortage of natural gas, which has boosted demand for oil products. At the same time, rising margins signal that crude consumption will remain strong as refiners continue to process more oil to meet demand. That could mean that global oil stockpiles will continue to fall in the coming months.
Futures rallied last week on concerns that rising consumption is racing ahead of supply. Oil prices rose early on Thursday, with Brent Crude rallying to $86.10—the highest price since October 2018. New York crude settled at a fresh seven-year high on Wednesday and closed Friday at $83.76. According to government data, US crude inventories fell by 431,000 barrels the week before last compared with a Bloomberg survey that had forecast a fourth weekly increase. Gasoline and distillate inventories also decreased more than expected. The market has tightened significantly as coal and natural gas shortages drive greater crude consumption, underpinning a rally in prices.
US crude futures posted an eighth straight weekly gain, the longest stretch of advances since 2015. Brent crude topped $85 a barrel in London for the first time since 2018, the latest milestone in a global energy crisis that has seen prices soar. The global benchmark rose above that level in intraday trading but did not settle above it on Friday. West Texas Intermediate for November settlement rose 97 cents to settle at $82.28 a barrel. Brent for December delivery added 86 cents to settle at $84.86 a barrel. The shortage of gas and coal is triggering extra demand for oil products from the power market. It’s also depleting stockpiles: the biggest US storage hub at Cushing recorded a considerable supply decline for this time of year.
West Texas Intermediate crude closed above $80 a barrel on Monday for the first time since late 2014 as a growing power crisis from Europe to Asia boosts demand for oil ahead of winter.
rices rose for the fifth straight week with the global energy crunch set to boost demand for crude as stockpiles decline from the US to China. Futures in New York gained 2.8% last week. The global benchmark Brent settled at the highest in nearly three years for the second day in a row on Friday. Global onshore crude supplies sank by almost 21 million barrels last week, led by China, while US inventories are near a three-year low.
Brent futures dipped on Friday but held above $75 a barrel, remaining on track for weekly gains of more than 3% thanks to the slow recovery in output after two hurricanes in the Gulf of Mexico. Brent crude futures fell 27 cents, or 0.36%, to $75.40 a barrel. West Texas Intermediate (WTI) crude futures closed at $72.22 after settling unchanged in the previous session. Hurricane Ida is now officially the most devastating hurricane ever in terms of oil production disruption, and experts expect the outages to last throughout September.
Futures rose towards $73 a barrel on Friday as refineries in Louisiana restarted and returning offshore production could not keep pace. About two-thirds of the US Gulf’s offshore oil production or about 1.2 million b/d has remained offline since late August. As a result, US crude inventories fell to the lowest since September 2019. The storm that hit the US Gulf of Mexico so far has removed more than 21 million barrels of crude from the market. Over 1.68 billion cubic feet per day of natural gas were also off-line on Friday, while a total of 65 platforms and three rigs continued to be evacuated.
Damages to oil production facilities in the US Gulf of Mexico kept output largely halted a week after Hurricane Ida made landfall, according to offshore regulator the Bureau of Safety and Environmental Enforcement. Energy companies have been coping with damaged platforms and onshore power outages and logistical issues, slowing efforts to restart production. Some 88% of crude oil output and 83% of natural gas production remained suspended. About 1.6 million barrels of crude oil remained offline, with only about 100,000 barrels added since Saturday. Another 1.8 billion cubic feet per day of natural gas output also was shut in.