On Thursday, the oil market saw negative trading as the state of the world economy remained unclear. United States (US) crude oil futures close 1.3% down at $82.16 a barrel after falling from a five-month high. Brent, the international standard, falls 1.4% to settle at $86.09. West Texas Instrument (WTI) crude was unable to rise beyond $83.45 and traders thought it may be the top for the time being.
The larger-than-expected increase in weekly initial jobless claims on Thursday heightened worries that the U.S. economy is stalling, which put pressure on crude prices. But, due to restricted global oil supplies, increased energy demand in China, and the dollar index’s drop to a 10-week low on Thursday, losses in crude were kept in check.
A little response was generated by the Organization of the Petroleum Exporting Countries’ monthly assessment of the forecast for supply and demand. Analysts said China’s oil import numbers were optimistic in terms of future demand. Oil prices will decline if the crude crack spread weakens.
On Thursday, the crack spread hit a one-week low, which made refiners reluctant to buy oil to turn into gasoline and distillates. Chinese crude imports for March increased by 16% month over month to 52.31 MMT (12.37 million bpd), the highest level since June 2020, according to the General Administration of Customs in China. China has imported 136.369 MMT more oil so far this year than last, a 6.7% increase.
Global oil supplies and is bullish for crude prices are becoming more scarce due to the prolonged suspension of Iraqi crude shipments from the Turkish port of Ceyhan. Before resuming Iraqi petroleum shipments through its pipeline, the Turkish government said it wanted to negotiate a $1.5 billion settlement that it has been obliged to pay.
Since March 25, Turkey’s 400,000 bpd oil exports from the port of Ceyhan have been halted due to Iraq’s victory in an arbitration case brought by the International Chamber of Commerce, which alleged that Turkey had broken the terms of a 1973 pipeline transit agreement by allowing crude from the Kurdish region to be exported without the approval of the Iraqi government.
As OPEC+ unexpectedly cut oil output by more than 1 million bpd beginning on May 1, crude prices spiked. As a “precautionary move aimed at supporting the stability of the oil market,” Saudi Arabia described the decrease. Mar OPEC crude output decreased by -80,000 bpd to 29.16 million bpd.e imports year-to-date are up +6.7% year on year at 136.369 MMT.
In a bearish factor, Vortexa reported Monday that the amount of crude stored on tankers that have been stationary for at least a week rose +6.8% week on week to 112.83 million bbl in the week ended April 7.
Wednesday’s EIA report showed that U.S. crude oil inventories as of April 7 were +2.8% above the seasonal 5-year average, gasoline inventories were -6.9% below the seasonal 5-year average, and distillate inventories were -11.6% below the 5-year seasonal average.
