Jan 10, 2025 (MarketLine via COMTEX) --
There was an overall increase in crude oil prices during the week after the US sanctioned Russian crude oil exports, with a particular focus on seaborne supplies. These sanctions follow similar ones from the European Union announced in December 2024, which were also aimed at curbing the usage of shadow fleet of tankers for exporting Russian crude oil. It could potentially limit the availability of crude oil in global markets as the country is one of the largest producers of this commodity. In a related development, Shandong Port Group aEUR" a leading port operator in China that handles crude imports at key terminals, such as Qingdao, Rizhao and Yantai aEUR" decided to ban all tankers that were under US-sanctions from docking at its ports. Prices also received some support from falling temperatures in the US and Europe that would lift the demand for heating oil. However, the gains in prices were somewhat restrained by the sluggish economic growth in the US and Germany. Besides, a significant increase in fuel stockpiles in the US over consecutive weeks also eroded the upside to prices.
Some key factors that led to changes in crude oil prices this week are as follows:
- Oil prices dipped slightly on Monday, weighed down by concerns over weak factory activity in the US that could impact the country’s energy consumption. As per the US Commerce Department, new factory orders in November 2024 dipped by 0.4% on a monthly basis, primarily due to a fall in orders for commercial aircrafts. Prices were also pressured by a rise in inflation in Europe’s largest economy, Germany, that continues to grapple with recession. The country’s inflation increased to 2.8% in December 2024, which is considerably higher than the European Central Bank’s target of 2%.
- Oil prices rose on Tuesday, supported by expectations that newer sanctions on Russian crude oil would cause a disruption in global supplies this year. A leading port operator in China, Shandong Port Group, banned the entry of oil tankers that are under US sanctions at all its ports in the country. This might prevent Russian and even Iranian shadow fleet of tankers from delivering crude directly to the country. Prices were also buoyed by prospects of a likely rise in fuel consumption, and hence crude oil demand, for winter heating across North America and Europe amid a cold wave.
- Oil prices declined on Wednesday, weighed down by worries over a substantial build in the weekly US gasoline and distillate inventory. The US Energy Information Administration (EIA) data showed that gasoline stockpiles rose by 6.3 million barrels while distillate stockpiles were up by 6.1 million barrels for the week ending on January 3, 2025. This was presumably due to higher refinery runs in the country that led to a draw in its commercial crude inventory of 959,000 barrels in the same week. Prices were also somewhat weighed down by a rise in the US dollar, which makes crude imports dearer for traders operating in other currencies.
- Oil prices rose last Thursday and then gained on Friday, supported by prospects of tight crude supplies from Russia after the outgoing US government announced new sanctions on the country’s oil exports. The sanctions primarily focused on Gazprom Neft and Surgutneftegas and a fleet of around 180 tankers - aimed at curbing Russian revenues amid the Ukraine conflict. Prices also received support from the ongoing cold wave across the US, which is expected to lift the country’s demand for heating oil. Refiners in the country increased their utilization rates by 0.6% during the week ending on January 3, 2025, as per the US EIA.
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COMTEX_461926710/2227/2025-01-17T01:49:33
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