Oil Futures: Crude Prices Slide in Late Sell-Off
01.20.2024 By Tank Terminals - NEWS

January 20, 2024 [Quantum Commodity Intelligence]- Quantum Commodity Intelligence – Crude futures were lower following Friday’s late sell-off, eroding the week’s otherwise modest gains which came largely after delayed EIA data showed a fall in US crude inventories during trade on Thursday.

 

Front-month Mar24 ICE Brent futures were trading at $78.50/b (1755 GMT), compared to the day’s high of $79.73 and Thursday’s settle of $79.10/b.

At the same time Feb24 NYMEX WTI was trading $73.50/b, versus Thursday’s settle of $74.08/b, while the more-liquid Mar24 contract was trading $73.22/b.

Crude earlier benchmarks consolidated Thursday’s gains, which have been the standout in an otherwise uneventful week for rangebound crude prices.

Last Friday, Mar23 ICE Brent closed at $78.76/b, while WTI settled at $72.68/b for the Feb23 contract, with the US benchmark comfortably outpacing the North Sea marker this week.

The earlier upward move came after the EIA’s delayed stock report showed a 2.3-million-barrel decline in US commercial inventories, which outstripped API calculations for a small build.

US product stocks surprised to the upside, with gasoline up 3 million barrels and diesel 2.37 million barrels higher versus expectations nearer to 5 million barrels for both.

Prices were also supported by the IEA lifting its 2024 demand outlook 180,000 bpd in its January oil market report. Its third hike in as many months, the consumer-led watchdog now sees 2024 oil demand at 1.2 million bpd versus 2.3 million bpd in 2023.

The pre-weekend sell-off comes despite several geopolitical risk events looming over the market, with ongoing militant attacks on commercial shipping in the Red Sea joined by heightened tensions between Iran and Pakistan.

“While the price of crude remains sensitive to events in the Middle East, as we’ve seen over the last couple of weeks, the oil market remains well-balanced,” said Craig Erlam, analyst at brokerage Oanda. “Supply disruptions remain an upside risk but there are downside risks too including the global economy and OPEC+ unity.”

Meanwhile, the US Congress has passed a short-term funding bill, avoiding a government shutdown. The bill extends funding for government agencies until the beginning of March, thus giving Congress more time to work out a permanent funding deal.

 

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