Crude oil yesterday settled down by -4.88% at 4465 after official data showed a sustained rise in U.S. crude and fuel inventories, while the ever-present pandemic clouded the demand outlook. U.S. crude oil, gasoline and distillate stockpiles all rose last week, as refiners boosted output with more facilities coming back online following February’s devastating storms in Texas.
On Wednesday crude oil prices were lower after industry data showed a surprise build in U.S. crude stocks last week as a deep freeze in the southern states curbed demand from refineries that were forced to shut.
On Friday crude prices fell at the end of a wild week in which a front of Arctic weather took over one-third of U.S. oil production offline. The disruptions to supply and demand were still far from resolved on Friday morning in the U.S., although a key obstacle to production was removed as ERCoT, the system operator for Texas’ electricity grid, said it no longer had to interrupt power supplies.
On Wednesday U.S. West Texas Intermediate and international-benchmark crude oil futures are trading lower after giving back earlier gains. Since weather concerns in Texas drove the market higher earlier in the session, I suspect that new forecasts calling for a break in the extremely cold conditions may be encouraging investors to book profits.
This year has brought in enough optimism for the oil market as prices of both Brent as well as WTI has gained by around 20 per cent. MCX oil futures have gained by around 21 percent so far this year. Oil is considered to be the benchmark indicator of growth in the global economy and the price rise clearly reflects this trend.
On Thursday oil major Royal Dutch Shell outlined the details of its near-term and long-term plans to transition to cleaner energy, saying its oil production and total carbon emissions have already peaked. The announcement comes at a time when the oil and gas industry is under immense pressure to dramatically speed up its plans to pivot away from fossil fuels, amid deep concern about the effects of the climate emergency.
The Brent crude price crossed the $60 per barrel mark yesterday after over a year on the back of crude oil-producing countries maintaining production cuts and expectations of improvements in global demand as the Covid-19 vaccine is rolled out across the world.