WTI Oil Dips Below $90

First Time Since Ukraine War Began

The U.S. crude oil benchmark dipped early on Thursday to the lowest level in months, falling below $90 a barrel for the first time since Russia invaded Ukraine at the end of February.

As of 10:30 a.m. ET on Thursday, the U.S. benchmark WTI Crude had fallen by 1.16% on the day and traded at $89.58. The international benchmark, Brent Crude, was also down and trading below $100 per barrel for a second consecutive day, amid a global economic slowdown and fears of recession, which could dent demand growth this year compared to last year. Brent had dropped by 1.44% to $95.36 at 10:30 a.m.

Moreover, the tightness in physical crude markets seems to have eased in recent days, with spot deliveries being traded at smaller premiums. Oil prices settled 4% lower on Wednesday, to levels seen just before the Russian invasion of Ukraine, after the U.S. Energy Information Administration reported a large build in crude oil inventories of 4.5 million barrels for the week to July 29.

https://oilprice.com/

Citi predicts oil prices will fall sharply this year

 Oil prices could slump to $65

Goldman Sachs reckons crude oil prices are going to $140 in the coming months. JPMorgan said they could even surge to $380 in a worst-case scenario. UBS reckons they’ll hit $130 in September. But Citi is bucking the trend. The investment bank’s strategists predict oil will fall sharply by the end of the year, from prices of around $100 a barrel on Friday.

Francesco Martoccia, the bank’s head of European commodities strategy, warned in note to clients Tuesday that oil prices could even slump to $65 a barrel by December, if a nasty recession hits. The same day, oil prices tumbled, with US benchmark WTI crude dropping below $100, as investors worried that central banks’ interest-rate hikes would trigger sharp slowdowns in economic growth.

Yet Martoccia and his colleagues expect oil to drop even if there’s no drastic slowdown. Their so-called base case is that the price of global benchmark Brent crude tumbles to $85 a barrel by the end of the year — that’s around 18% lower than Friday’s price of $104. At the heart of Citi’s contrarian view is its expectation that Russia will keep exporting and producing crude, even as the US and its allies batter the country with sanctions.

Many analysts expect Russian energy exports to fall sharply by the end of the year as the European Union gradually bans purchases from the country. The G7 is also exploring how to cap Russian oil prices — which could cause exports to drop further. The logic is simple. Unable to sell its oil, Russia will shut down production. Buyers will then be competing for the remaining global supplies, driving up oil prices.

https://finance.yahoo.com/

Oil Slips

Prospect Of Rising OPEC+ Supply

Oil prices dropped early on Thursday as the market assesses the prospect of higher crude supply from the OPEC+ group after a reported compromise between key OPEC members Saudi Arabia and the United Arab Emirates (UAE). As of 11:21 a.m. EDT on Thursday, WTI Crude prices were down by 0.53 percent at $72.78 and Brent Crude was falling by 0.56 percent at $74.37.

Oil prices extended losses from Wednesday, when the market fell sharply after reports emerged that Saudi Arabia and the UAE had resolved their nearly two-week-long standoff over baseline production levels that was blocking a unanimous OPEC+ deal on oil supply. Under the compromise, the UAE will see its baseline production level lifted to 3.65 million barrels per day (bpd) after the current pact expires in April 2022, according to a Reuters source. The current baseline for the UAE is around 3.17 million bpd.

https://oilprice.com/