| At 10:14 am Singapore time (0214 GMT), the ICE March Brent futures contract was up 47 cents/b (0.54%) from the previous close at $86.95/b, while the NYMEX February light sweet crude contract rose 83 cents/b (0.99%) from the Jan. 14 close at $84.65/b.
After briefly dipping into negative territory in the intra-day Asian session Jan. 17, the front-month ICE Brent crude contract managed to pull away to settle 0.5% higher overnight. Crude prices have now added close to 12% in value since the start of the year. Geopolitical risks were on investors’ radar this week after reports of Yemeni Houthi rebels launching an attack Jan. 17 on ADNOC’s storage facilities and the international airport in the UAE. Tensions in the Russia-Ukraine crisis meanwhile remained high, with Poland’s foreign minister saying late in the week ended Jan. 14 that the region was at risk of plunging into war. Several analysts had said in an S&P Global Platts podcast Jan. 10 that an outbreak of war on the Russia-Ukraine front could potentially send oil prices to $100/b. (S&P Global Platts)
Several OPEC members continue to struggle to raise output to their required quota levels. Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said at a conference Jan. 17 that the country does not plan to pump more crude beyond its quota to make up for other OPEC+ members’ production shortfalls despite increasingly tight spare output capacity among the group. However, UAE Energy Minister Suhail al-Mazrouei said in the same conference that OPEC+ alliance would ensure no supply squeeze in the market to maintain stable prices. (S&P Global Platts)
Chinese output data yesterday showed that domestic crude oil production in December averaged 3.9MMbbls/d, up 1% YoY, while domestic refineries processed 13.89MMbbls/d of crude oil over the month, down 2% YoY. Taking into consideration this data, along with import volumes for the month, suggests that Chinese crude oil inventories grew by a little over 900Mbbls/d in December. If the stronger oil price environment persists, we would not be surprised to see China taking a step back from the oil market. (ING)
There are several data releases today. These include further trade data for China, which should cover refined products. Then later in the day, OPEC will release its monthly oil market report, which will include December production numbers for the group, as well as their outlook for 2022. This will be followed by the EIA’s Drilling Productivity report which includes drilling and completion activity for the US. (ING)
OIL MARKET ROUND-UP: (Bloomberg)
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