Crude oil futures closed lower on Thursday (22nd), snapping a three-day winning streak, as traders tracked a major winter storm sweeping across the United States and kept a close eye on China’s progress in easing epidemic prevention restrictions.
A sharp sell-off in equities also appeared to be weighing on crude, analysts said.
energy commodity prices
- February delivery WTI Crude OilFutures fell 80 cents, or 1%, to settle at $77.49 a barrel.
- February delivery Brent Crude OilFutures fell $1.22, or 1.5%, to settle at $80.98 a barrel.
- delivered in March Brent Crude OilFutures fell 91 cents, or 1.1%, to settle at $81.67 a barrel, the most actively traded Brent futures.
- Gasoline futures for January delivery fell 0.3% to settle at $2.2488 a gallon.
- delivered in JanuaryHot Fuel FuturesPrices fell 0.3 percent to $3.1314 a gallon.
- Natural gas for January delivery tumbled 6.3% to settle at $4.999 per million Btu, the lowest close since Oct. 21.
market driving force
Forecasts show heavy snow, ice, flooding and even tornadoes across the U.S. from the Plains, Midwest to the East Coast from Thursday to Saturday, followed by a gust of cold air. This Christmas weekend might be the coldest in decades in the United States. The market is betting that the cold snap will reduce year-end holiday travel.
Crude oil futures rose in early trading, extending the gains seen following the EIA on Wednesday (22nd). The US Energy Information Administration (EIA) announced on Wednesday that US crude oil inventories fell by 5.9 million barrels last week (12/16), gasoline inventories increased by 2.5 million barrels, and distillate inventories decreased by regarding 200,000 barrels.
According to the S&P Global Commodity Insights survey, analysts on average expected crude oil inventories to rise last week by 600,000 barrels, gasoline inventories rose by 1.6 million barrels and distillate supplies fell by 400,000 barrels.
Crude oil prices rose nearly 3% following Wednesday’s data, and the gains would have been more pronounced were it not for fears that the storm would limit travel, XM senior investment analyst Charalampos Pisouros said in a report.
U.S. stocks fell sharply, while the U.S. dollar has made gains following a recent retreat.
Stephen Innes, partner manager of SPI Asset Management, said: “Crude oil prices seem to follow the broader market today, dragged down by a stronger dollar, and cross-asset markets are held hostage by risk aversion. Recession fears are closely related.”
Meanwhile, investors continued to assess the impact of China’s easing of coronavirus restrictions.
“After hitting a near one-year low on Dec. 9, oil prices have entered recovery mode, setting higher lows this week, perhaps on expectations that China will ease restrictions on the epidemic. Still, it’s too early to talk of a full-blown reversal Bullish, as it may take some time for China’s economic engine to restart and oil demand to recover,” Pissouros wrote.
Oilfield services company Baker Hughes said on Thursday the U.S. oil rig count rose by two to 622 this week, up 142 from a year earlier.
EIA announced on Thursday that last week (12/16) natural gas inventories fell by 87 billion cubic feet. Analysts had expected a draw of 94 billion cubic feet in natural gas inventories, according to S&P Global Commodity Insights.