Crude oil prices fall in a volatile session… and Brent is below $85 – (Update)

Crude oil prices fall in a volatile session… and Brent is below $85 – (Update)

Crude oil prices fell for the first time in 4 consecutive sessions at the end of trading today, Thursday, February 9 (2023), with concerns about demand in America.

Crude prices witnessed a volatile session; Optimism about a recovery in Chinese demand was offset by concerns about weak economic activity in the US, after inventories hit a 19-month high.

Crude oil prices today

At the end of trading, the futures prices for Brent crude, the benchmark for April 2023 delivery, fell by 0.7%, to reach $84.50 a barrel, after rising to $85.50 during the session.

The price of US West Texas crude futures – for March 2023 delivery – fell by 0.5%, to $78.06 a barrel, according to data seen by the specialized energy platform.

Crude oil prices ended their trading, yesterday, Wednesday, February 8, with an increase of more than 1.5% for the third consecutive session, with optimism about the demand for crude and the decline of the US dollar.

Oil market conditions

Analysts from Haitong Futures said that US oil inventories continued to exceed expectations; This somewhat eroded the bullish sentiment generated by hopes for demand recovery in China.”

Crude oil prices
US Strategic Oil Inventories – Photo courtesy of Reuters

Yesterday, Wednesday, the Energy Information Administration said that crude oil inventories in the United States rose, last week, to their highest levels since June 2021, supported by higher production. US inventories of gasoline and distillates also rose last week; The demand for fuel remained weak.

On Wednesday, Fed officials said more interest rate increases are on the table; The US central bank is pressing ahead with its efforts to cool down inflation, although none of them were prepared to suggest that the January jobs report could prompt them to take a more aggressive stance on monetary policy.

demand for oil

Crude oil prices are supported by the prospect of increased demand from China; The world’s second largest oil consumer ended more than 3 years of a strict coronavirus non-spread policy involving citywide lockdowns and mass testing in December.

“Travel increased sharply in China after the Lunar New Year holidays, and we expect Chinese oil consumption to increase by about 1 million barrels per day this year, with strong growth emerging in late in the first quarter.

“Overall, this should lead to an increase in global demand by 2.1 million barrels per day in 2023,” they added, according to Reuters.

Meanwhile, BP Azerbaijan declared force majeure on shipments of Azerbaijani oil from the Turkish port of Ceyhan on February 7 after a massive earthquake struck Turkey and Syria early Monday.

The disaster had halted operations in Ceyhan and disrupted flows of crude oil from Iraq and Azerbaijan.

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