An early review of oil prices on Monday, Jan 22 has shown that Brent crude price was at $78.47 per barrel around 03:53 am GMT.
Reuters reported that prices struggled to gain momentum as economic uncertainties weighed heavily on the outlook for global oil demand, countering geopolitical tensions in the Middle East and a recent attack on a Russian fuel export terminal.
- “Brent crude edged down by 9 cents, or 0.1%, settling at $78.47 a barrel by 0353 GMT, following a 54-cent decline on Friday. Meanwhile, the front-month U.S. West Texas Intermediate crude futures for February delivery inched up by 11 cents to $73.52 a barrel, with the contract nearing its expiration on Monday. The more active March WTI contract stood at $73.21 a barrel, down by 4 cents.”
According to reports in the Middle East, ongoing conflicts, including the Gaza war and a U.S. strike on a Houthi missile in the Gulf of Aden, added to the geopolitical complexities.
Despite geopolitical concerns, particularly an alleged Ukrainian drone attack at a significant Russian fuel export terminal, oil prices exhibited minimal movement.
Russian producer Novatek reported a suspension of some operations at the Baltic Sea terminal due to a fire. Experts suggested that the subdued market reopening reflected the current sentiment in the crude oil market.
Recall last week Nairametrics reported that oil prices had sunk to $77 per barrel, yet this is far from the average of $94/bbl in September, reversing all the gains accrued in 2023 Q3.
Tightened European and African crude markets
Yet, despite these events, crude oil appeared set for rangebound trading with some downward pressure, according to Vandana Hari, founder of oil market analysis provider Vanda Insights.
Disruptions caused by attacks in the Red Sea and the Gulf of Aden have impacted global trade, tightening European and African crude markets.
- The first-month Brent contract’s premium over the six-month contract widened to $1.99 on Friday, indicating a perception of tighter supply for prompt delivery, known as backwardation.
- IG’s Sycamore highlighted prevailing headwinds for oil prices, citing increased production, mixed growth outlooks in China and Europe, and an anticipated slowdown in the U.S. economy, as indicated by upcoming GDP data.
Various organizations, including the U.S. Energy Information Administration, the International Energy Agency, and the Organization of the Petroleum Exporting Countries, presented a wide range of demand growth forecasts for 2024, ranging from 1.24 million to 2.25 million barrels per day.
