Oil is one of the most important commodities in the global economy. It’s a major source of energy, and its price affects many industries and countries around the world. The price of oil can be volatile depending on various market forces such as supply and demand among others.
Today, there have been changes to the price of oil. Specifically, Brent crude dropped to $84.94 while West Texas Intermediate (WTI) dropped to $78.75 per barrel. These changes have left many people wondering what has caused these shifts in price, as well as what implications this will have for global markets going forward. In this article, we’ll discuss what factors drive oil prices and why these latest changes occurred. We’ll also look at how these new prices might affect the global economy moving forward.
Brent Crude is loosing today -0.87% to $84,94
Brent crude oil prices dropped by 0.87% to trade at $84.94 per barrel on February 1st, 2023 [1], according to the continuous contract and open interest of 479,413. This is the biggest drop in the past five days, with the Brent crude posting a month-long increase of 9.77% and a three-month decline of 10.25%. The Year-To-Date (YTD) return for Brent crude is -0.30% [1]. The decline in oil prices is attributed to concerns about a looming global recession, a stronger U.S. dollar, and rising interest rates from central banks [2]. A survey of 30 economists and analysts forecast Brent crude to average $89.37 a barrel in 2023, which is 4.6% lower than the $93.65 projected for the previous year [3]. The impact of Western sanctions on Russian oil is expected to minimal [3].
References:
[1] Brent Crude Oil Continuous Contract – BRN00 – MarketWatch [2] Brent crude slides below $85 a barrel as dollar surges – CNBC [3] Economic weakness set to weigh on oil price in 2023 – Reuters
West Texas Intermediate Crude Oil WTI is down to $78,75 (0.47%)
West Texas Intermediate (WTI) crude oil prices fell to $78.75 per barrel, a 0.47% decrease from the previous day’s closing price of $81.62 per barrel, according to data from the Cushing, Oklahoma Dow Jones Oil Index [1]. This slight dip in oil prices comes despite a record $1 trillion clean-energy investment, and U.S. crude-oil stockpiles remaining unchanged [3]. Additionally, gold futures have been on the decline in anticipation of the Fed decision [2]. This shift towards renewable energy investments could potentially be a sign of a larger trend towards clean energy resources, as Amazon recently announced that they plan to operate on 100% renewable energy within two years [3].
References:
[1] Crude Oil Prices: West Texas Intermediate (WTI) – Cushing … [2] CL.1: WTI Crude (Mar’23) – Stock Price, Quote and News
[3] Crude Oil WTI (NYM $/bbl) Front Month Overview – MarketWatch
Oil rises as US recession fears ease and dollar slips
Oil prices began to rise on Wednesday, thanks to a weaker U.S. dollar and easing fears of a recession. The dollar index, a measure of the greenback’s strength against a basket of currencies, had slipped as signs of slowing inflation in the US suggested that the Federal Reserve would not be raising interest rates as aggressively as expected [1]. Additionally, the upcoming meeting of OPEC and its allies, as well as further US government data on crude and fuel stockpiles, have further buoyed oil prices [2]. These factors have helped to make oil more affordable for those holding other currencies [3].
References:
[1] Oil rises as U.S. recession fears ease and dollar slips | Reuters [2] Oil prices tick up ahead of Fed, OPEC decisions – CNBC [3] Oil rises as U.S. recession fears ease and dollar slips – NasdaqUkraine’s Zelenskyy pressing supplying fighter jets to Kyiv
Ukrainian President Volodymyr Zelenskyy expressed his gratitude to Kyiv’s allies on Wednesday for the sending of tanks, but he said he had to press for Western fourth-generation fighter jets such as the U.S.-made F-16 [2]. Kyiv is hopeful that the fighter jets will be the next supply of military support from its allies, as they would greatly benefit the Air Force [1]. However, providing the jets would be a difficult decision due to the risk of Russian surface to air missiles [3].
References:
[1] Ukraine’s defense minister pushes for Western fighter jets – NPR [2] Ukraine aims for F-16 fighter jets after winning battle for tanks [3] Ukraine sets sights on fighter jets after securing tank supplies
