Global Energy Prices Reach Highest Level in a Month Due to U.S. Stock Boost

International oil prices rose on Monday (19th), reaching the highest level in about a month, as rising U.S. stocks boosted the outlook for the economy and energy demand, while global supply continued to face risks.

energy commodity prices

• West Texas Intermediate (WTI) crude oil futures for February delivery rose $1.78, or 2.4%, to close at $75.19 a barrel before expiration today.
• West Texas Intermediate crude oil futures for March delivery, the most actively traded WTI futures, rose $1.51, or 2.1%, to $74.76 a barrel.
• Delivered in MarchBrent crude oil (Brent) futures rose $1.50, or 1.9%, to $80.06 a barrel.

according toDow JonesMarket data, recent months Brent and WTI crude oilFutures hit their highest closing prices since December 26.

• Gasoline futures for February delivery rose 3.5% to settle at $2.24 a gallon, the highest closing price since November 29.
• Delivered in FebruaryThermal Fuel FuturesPrices rose 1.2% to $2.69 per gallon.
• Natural gas futures for February delivery fell 4% to settle at $2.42 per million Btu.

market drivers

Phil Flynn, senior market analyst at Price Futures Group, said oil traders are “beginning to realize that as stocks hit new highs, a recession is unlikely, which is increasing demand expectations at a time when supply appears to be tightening.”

“If the economy continues to grow, demand will exceed expectations and supply shortages will be even higher entering the new year,” Flynn said.

He believes that tensions in the Red Sea and tensions between China and Taiwan indicate that risks to oil supplies are high. “At the same time, severe cold temperatures have hit North Dakota’s oil production hard, and output will be reduced for at least the rest of this month.” Decline.” He said February could be hit by another storm and that bad weather would make it difficult for oil companies to increase the number of rigs.

Fawad Razaqzada, market analyst at City Index and FOREX.com, said that “positive risk sentiment” will also help drive up oil prices. As technology stocks continue to push up U.S. stocks, the U.S. stock market is heading into new and unknown territory.

Positive risk sentiment in the stock market “helps boost investor interest in other risk assets, including crude oil,” he said.

recent months WTI crude oilFutures rose 1% last week, while front-month Brent crude oilIt barely rose 0.3%. Analysts at Sevens Report Research reported on Monday that oil prices rose last week largely due to production disruptions caused by cold weather in North Dakota and other parts of the northern United States.

Crude oil prices have occasionally moved higher due to developments in the Middle East, but have failed to build a geopolitical risk premium, with WTI still trading about $20/barrel below the 2023 high set in late September.

A recent report by analysts at JPMorgan Chase pointed out that according to its pricing model, oil prices may not experience a geopolitical premium despite the U.S. coalition’s attack on the Houthi rebels in Yemen. “This may reflect that the impact of shipping disruptions in the Red Sea on global oil is likely to be small and easily handled. Oil shipping companies can reroute to avoid the narrow Bab el-Mandab Strait at the southern end of the Red Sea, but rerouting is costly and would extend voyages by about 8 to 9 days, adding fuel and insurance costs and making the barrel Brent crude oilUp about $2. “

They said that Gulf Arab countries also rely extensively on onshore pipelines. For example, Saudi Arabia can use its east-west giant pipeline to bypass the strait and transport crude oil from the Persian Gulf oil fields to the city of Yanbu on the Red Sea.

In the United States, natural gas futures prices fell for the fifth consecutive trading day and hit the lowest closing price since December 14.

Victoria Dircksen, commodities analyst at Schneider Electric, said natural gas heating demand “is expected to increase rapidly this week as the National Oceanic and Atmospheric Administration (NOAA) expects temperatures to return to above-average levels in the continental United States from this week into early February.” Reversal lower.”

2024-01-22 21:50:11
#Energy #afterhours #U.S #stocks #drove #risk #sentiment #supply #risks #oil #prices #closed #onemonth #high #Anue #JuhengEnergy