2024-01-23 23:57:18
Geopolitical risks
Oil was range-bound in January, with geopolitical risks countered by expectations that supplies from non-OPEC producers will continue to expand. Major oil trading company Gunvor Group Ltd said that the first half of the year will be dominated by production growth from outside the group, which will eventually stabilize, with markets remaining in a restricted range.
S&P: OPEC+ may reduce oil production once more in the first quarter
“We believe oil markets are well supplied, and that is likely to continue to be the case this year,” said Vivek Dhar, mining and energy commodities analyst at Australian Commonwealth Bank. He added that while the situation in the Red Sea has increased trade costs, it is unlikely to materially increase oil prices, given that supplies have not been directly affected.
The US crude inventory report comes following inventories declined in three of the past four weeks, and amid disruptions caused by a wave of cold weather. Freezing conditions reduced supplies from shale drillers in the Bakken Basin and hampered refining operations.
The price differences between the two closest oil contracts indicate a near-term uptrend. The gap reached 44 cents per barrel, in the case of “backorder”, compared to 3 cents at the beginning of the year.
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