| At 10:05 am Singapore time (0205 GMT), the ICE March Brent futures contract was down 31 cents/b (0.37%) from the previous close at $84.16/b, while the NYMEX February light sweet crude contract fell 44 cents/b (0.54%) at $81.68/b.
Oil prices appeared to have lost their upward momentum after gains of close to 6% earlier in the week. The Relative Strength Index on the daily and four-hourly charts for both crude oil benchmarks showed prices hovering near overbought territory, indicating they might be ripe for profit-taking. Nonetheless, despite slight overnight losses, the front month ICE Brent and NYMEX light sweet crude contracts remained on track for a fourth straight week of gains, having added 15.1% and 16.6% in value, respectively, over this period. (S&P Global Platts)
Crude has now clawed back most of the losses late last year that were driven by omicron and the White House-led releases from national reserves. Although it’s proved to be fast-spreading, the variant is also milder, lessening the impact on energy consumption. The International Energy Agency said earlier this week that global oil demand has proven stronger than expected. (Bloomberg)
Google data showed oil demand markers in most of the world’s biggest oil-consuming countries rising from seasonal, year-end lows. Mobility in 13 countries representing about half of global oil demand averaged 18.7% below pre-COVID-19 levels in the week to Jan. 10, according to adjusted Google mobility data, up from a low of 25% below on Jan. 6. The current activity level also compares with 33% below pre-COVID levels during the same week in 2021. (S&P Global Platts)
At some point, this growing U.S. oil production might begin to weigh on oil prices, but it will be a while before this happens, it seems. Right now, prices are getting a boost from production and export disruptions in Libya, the unrest in Kazakhstan, and worries about OPEC running out of spare production capacity. However, the EIA has forecast that the average annual prices this year will be lower than last year’s. In its STEO, the EIA forecast Brent crude averaging $75 per barrel this year and WTI trading at $71.32 per barrel. This will further decline to $68 per barrel for Brent and $63.50 per barrel in 2023. The agency cited rising global oil inventories and an expected slowdown in demand growth. (Oilprice.com)
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