The global price of a barrel of oil declined by about 1%, during today’s trading, Thursday, January 19, 2023, to continue bleeding losses for the second consecutive session.
This comes after US data indicated a sudden jump in US crude stocks, along with fears of a recession, which were fueled by the disappointment of retail data in the United States.
The global price of a barrel of oil today
By 07:47 a.m. GMT (10:47 a.m. Mecca time), the prices of benchmark Brent crude futures – for delivery in March 2023 – fell by 0.82%, to $84.28 a barrel.
The price of US West Texas crude futures – for February delivery 2023 – fell by 0.99%, to $78.69 a barrel, according to data viewed by the specialized energy platform.
Oil prices ended their trading, yesterday, Wednesday, January 18, on the decline, after a volatile session, with concerns about slowing economic growth in the United States, after the release of economic data.
Oil market conditions
Analyst at CMC Markets, Tina Teng, said: “The deterioration of US economic data overshadowed the outlook for oil demand, with recession fears escalating again.”
She pointed out that risk-averse sentiment led to a decline in growth-sensitive commodities, adding that profit-taking contributed to the decline in the price of a barrel of oil globally.
US retail sales for December fell by the most in a year, while industrial production posted its biggest drop in nearly two years; Higher borrowing costs hurt demand for commodities.
However, Fed officials said interest rates should rise beyond 5% even as inflation shows signs of peaking and economic activity slows.
“This raised the specter of a recession, with risk appetite suffering as a result,” ANZ Research analysts said in a note to clients.
US oil stocks
Adding insult to injury, data from the American Petroleum Institute showed that US crude oil inventories rose by about 7.6 million barrels in the week ending January 13, according to market sources.
The average forecast from a Reuters poll of 9 analysts was for a decline of about 600,000 barrels.
However, distillate stocks, which include diesel and heating oil, fell by about 1.8 million barrels, compared to analysts’ expectations for an increase of 120,000 barrels.
The API report has been delayed by a day due to the Martin Luther King Jr. holiday, Monday in the US, and the government Energy Information Administration will release its weekly inventory report on Thursday evening.
As interest rates continue to rise sharply, the US dollar has rallied; What weighed on the demand for oil; A strong dollar makes the commodity more expensive for holders of other currencies.
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