Oil Prices Climb Concerns over Russian, Iranian Flows
Oil prices climbed further on Wednesday in the global commodities market amidst concerns over Russian and Iranian oil flows. Prices surged on the back of stronger-than-expected demand indicators in the US, the world’s largest oil consumer, and President Joe Biden’s ban on offshore drilling along most US coastlines. .
Brent crude rose by 0.5%, reaching $77.24 per barrel. The US benchmark West Texas Intermediate (WTI) increased by 0.6%, rising to $74.23 per barrel, compared to its prior session close of $73.76. ICE Brent pushed above US$77 per barrel yesterday with sentiment still largely supportive following a stronger physical market, according to ING note,
Analysts said concerns over Iranian and Russian oil flows will also be providing some support. There were reports yesterday that a port operator in Shandong, China, has told ports not to accept tankers sanctioned by the US. Refiners in the region are large buyers of Iranian crude oil and so if these ports follow through, it potentially provides more obstacles to Iranian oil flows.
According to ING, strength in the market continued in early morning trading today after the America Petroleum Institute (API) numbers showed that US crude oil inventories fell by 4m barrels over the last week, while Cushing stocks declined by 3.1m barrels.
Projections for weekly crude oil inventories from the American Petroleum Institute (API) indicated a larger-than-expected drawdown in commercial crude stocks for the week ending January 3.
API data indicated a decline of 4.02 million barrels, surpassing market expectations of a 250,000 barrel fall. The decrease in stocks suggests strengthening demand in the US.
The US Energy Information Administration will release official inventory data later on Wednesday. Expectations that Trump’s policies will prioritize boosting fossil fuel production following his inauguration on January 20, are capping further price gains.
President Joe Biden announced Monday that he is moving to ban new offshore oil and gas drilling along most US coastlines. The executive action will prevent new oil and gas leasing across 625 million acres of US ocean.
Trump vowed to quickly revoke outgoing President Biden’s ban on offshore oil and gas drilling. ‘Banning offshore drilling will not stand. I will reverse it immediately,’ Trump told reporters Tuesday in the state of Florida, one day after the 2024 election results were certified by Congress.
‘We’re going to be drilling in a lot of other locations, and the energy costs are going to come way down’ he said. #Oil Prices Climb Concerns over Russian, Iranian Flows Cryptocurrencies Market Cap Rises as Bitcoin Pops Higher
