October 3, 2022
Chicago 12, Melborne City, USA
Finance

Oil prices head for another strong weekly gain as supply worries dominate

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Oil prices were higher on Friday and led to a stronger weekly gain, as supply concerns returned.

Price action
  • West Texas Intermediate Crude CL.1, for June Delivery
    + 2.29%

    CL00,
    + 2.29%

    CLM22,
    + 2.29%
    $ 2.36 or 2.5% increase to $ 110.82 per barrel. The New York Mercantile Exchange closed 0.4% higher at $ 108.26 a barrel on Thursday.

  • July Brent Crude BRN00,
    + 2.30%

    BRNN22,
    + 2.30%,
    The global benchmark rose $ 2.13, or 2.3%, to $ 113.26 a barrel. The contract rose 0.7% to $ 110.90 a barrel in ICE Futures Europe on Thursday.

  • June Natural-Gas Futures NGM22,
    + 1.99%
    Per million British thermal units rose 1.5 to $ 8.923. On Thursday the contract jumped 4.4% to close at $ 8.783 per million British thermal units, the highest since August 1, 2008.

  • June Petrol RBM22,
    + 1.29%
    Oil heats up 0.9% to 69 3.6915 per gallon in June
    + 0.15%
    0.6% up $ 4.068 per gallon.

Market drivers

Both West Texas Intermediate and Brent Crude were ready for a weekly gain of more than 5%, marking a third-straight weekly profit for each, according to Factset.

Ole Hansen, head of Saxo Bank’s commodity strategy, said in a note to clients that “the Chinese lockdown and rate hikes have shifted the risk of declining commodity demand and returning to supply, which is going to be tough.” .

“OPEC + has announced another 432k barrels / day increase in oil production for June but OPEC10 (which has quotas) lags behind 800k barrels / day in April and Russia and Kazakhstan are lagging behind, the group is currently unable to supply barrels. I noticed, “said Hansen.

Also, a surprising US announcement about the European Union’s embargo on Russian oil imports and the launch of its SPR refill [strategic petroleum reserves] Already underpinning the price this autumn, ”he said.

In Brent, the next level of resistance is the April high of around $ 115 with support at $ 110, he said.

Analysts said the rise in oil on Thursday was hampered by strong selling of Wall Street stocks and the strength of the dollar. The latter can act as a headwind for dollar-denominated goods, making them more expensive than other currencies.

Read: These traders have predicted the collapse of bonds, the sale of technology and the rise of oil. He saw $ 260 oil in one year.

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