BBI INFO

1. Market review: Crude oil fell more than 1% in intraday trading, WTI crude oil fell from above the 80 mark, and closed down 1.25%, to 79 US dollars / barrel; Brent crude oil fell below the 85 and 84 US dollar marks successively in the intraday session, closing down 1.62 %, at $83.98 a barrel. European natural gas fell at an accelerated rate. Intercontinental Exchange Dutch TTF natural gas futures prices fell by more than 15% in intraday trading, with a cumulative decline of as much as 27% this year.

2. Jeff Curry, head of commodities at Goldman Sachs, said that if international travel resumes this year, oil consumption could increase by 2 million barrels per day this year.

3. Russia will reduce the oil export tax to 12.8 US dollars / ton from February 1. Seaborne crude exports from Russia surged last week to their highest level since April last year, with the less volatile four-week average rising to an eight-week high, suggesting Russia has now overcome the initial hit to crude exports following European sanctions.

4. Russian Deputy Prime Minister Novak stated that in 2022 Russia’s budget revenue from oil and natural gas will increase by 28% year-on-year to 2.5 trillion rubles.

5. Global LNG imports will total 409 million tonnes in 2022, compared with 379.6 million tonnes the year before, according to the latest data from Refinitiv. The record number stems from a surge in demand, especially from the European Union, the report said. In 2022, EU LNG imports will reach 101 million tons,2 an increase of 58% over 2021, making the EU the world’s largest LNG buyer.

6. From January 17, India will reduce the windfall tax on crude oil from 2,100 rupees/ton to 1,900 rupees/ton. Last month, India, the world’s third-largest crude oil importer, imported a record 1.2 million barrels of oil from Russia, a 32-fold year-on-year increase and a 29% month-on-month increase, according to Vortexa Ltd.

MARKET VIEWPOINTS

Craig Erlam, Market Analyst, OANDA

Oil prices edge lower but optimism improves in oil market
Oil prices fell slightly yesterday but have now recouped most of their losses from their sharp start to the year and there is no doubt that improving optimism about the economy has played a big role in this, with interest rate hikes before the end of the year Reduced or even lower expectations of rate cuts also make the headwinds less drastic. While the spread of the virus is taking its toll on the economy, there is no lack of optimism for the rest of the year, especially the second half. Even the oil price rebound may come as early as the second quarter

TD Securities

The oil market is flooded with China’s recovery. Expectations that China’s economic growth will increase crude oil demand have played a very large role in the current oil market sentiment. It is expected that as much as 1 million barrels of crude oil demand may return every day.

ANZ Bank

Economic outlook will weigh on oil prices
Crude oil prices fell yesterday as investors reassessed the outlook for global demand. Brent crude oil prices have risen nearly 10% over the past 10 days as optimism over China’s reopening has boosted sentiment. However, the economic outlook for the rest of the world is less clear. The World Economic Forum opens with warnings of a global recession. There are signs that rising supplies of Russian crude are also fueling the trend. Seaborne crude exports surged 30% to 3.8 million bpd last week, the highest since April. India was the biggest buyer, buying 33 times as much crude as it did a year earlier. However, investors are wary of the upcoming sanctions on Russian crude products. From Feb. 5, the European Union and the Group of Seven nations will try to limit the price of Russian fuel exports, which will have to displace around 600,000 barrels per day of diesel imports.

ING

Oil prices rise further in the second quarter
Brent is almost back to where it was at the start of the year after a strong performance in the oil market last week. While the market remains optimistic about Chinese demand, the oil market remains relatively well supplied in the short term. As the market tightens, we expect oil prices to rise further from the second quarter onwards. Moreover, the latest market positioning data showed little change in speculative long positions in Brent despite some volatility in the market so far this year. As of last Tuesday, the net long position in Brent crude oil was reduced by 4344 contracts, but considering the direction of the market and the increase in open interest since then, the current net long position may have increased.

Matthew Bey, Senior Global Analyst, RANE

Rising oil prices may expand demand for crude oil investment
While oil prices have not risen sharply since Europe imposed a price cap on Russian crude in December, they are likely to rise in the second half of next year when the pandemic subsides and economic growth in advanced economies and China boosts demand for crude. For oil and gas companies, if oil prices rise this will trigger more demand to expand crude oil investments.

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