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Crude oil rose in range-bound trading this week as concerns about China's economy cushioned the effects of fighting in the Middle East.
Analysts say China's fourth-quarter economic growth has been slower than expected renewed doubts about the forecasts that there will be demand boost global oil growth in 2024.
Concerns about China figure prominently in the fundamental pessimism from an oil market that has relied on geopolitical events for profits, said Rebecca Babin, energy trader at CIBC Private Wealth.
Meanwhile, the International Energy Agency said this week it expects a broadly supplied market this year and raised its forecast for global oil demand growth.
Tensions remain high over fighting in Gaza as Israeli forces continue to advance south against Hamas, while the United States launched several strikes this week against Houthi missiles used to attack ships in the Red Sea.
But oil prices have remained in a tight trading range to date as the main players in the conflict are responding.”in a measured way not looking for a strong escalation,” according to Macquarie analysts.
Most attacks in the Red Sea have involved a single or small number of projectiles, have been “highly calibrated” and have caused minimal damage, and the US-led responses have been “equally calibrated”, Macquarie said.
First month Nymex crude oil (CL1:COM) for February delivery ended the week +1% to $73.41, despite falling 0.9% on Friday, while March front-month Brent crude (CO1:COM) closed the week +0.3% up to 78.56 dollars/bbl, after falling 0.7% on Friday.
ETF: (NYSEARCA:USE), (BNO), (UCO), (SCO), (USL), (DBO), (DRIP), (GUSH), (NRGU), (USOI)
The Energy Department said Friday it purchased 3.2 million barrels of oil for the Strategic Petroleum Reserve, as it continues to slowly rebuild inventories after selling a record amount following Russia's invasion of Ukraine in 2022.
The Energy Department said Exxon Mobil (XOM) will sell the government 1.4 million barrels, BP (BP) and Macquarie will provide 600,000 barrels each, while Phillips 66 (PSX) and Sunoco (SUN) will sell 300,000 barrels each. .
The department said it paid an average price of $75.96/bbl, or a total of $243 million, for crude, compared to the average $95/bbl SPR crude sold in 2022; Since it began buying oil to replenish reserves last year, it has purchased ~17 million barrels at an average of $75.75 a barrel.
Energy (NYSERCA:XLE) ranked second from bottom among stock market sectors this week, finishing -3%.
Top 5 gainers in energy and natural resources over the last 5 days: Uranium Royalty (UROY) +33.4%Enerflex (EFXT) +14.4%Overseas Vessel Holding (OSG) +12.6%Uranium Energy (UEC) +11.7%Alpha Metallurgical Resources (AMR) +11%.
Top 10 Declines in Energy and Natural Resources Over the Last 5 Days: Plug Power (PLUG) -27.9%American Battery technology (ABAT) -27.9%Piedmont Lithium (PLL) -22.1%Aemetis (AMTX) -21.9%Stem (STEM) -20.8%Lithium Americas – Argentina (LAAC) -18.1%Fortuna Silver Mines (FSM) -16.8%Genie Energy (GNE) -16.3%Arcadium Lithium (ALTM) -sixteen%Lithium Americas (LAC) -15.7%.
Source: Barchart.com
