Market Wrap: CRUDE WTI (H4) SETTLES USD 1.04 HIGHER AT 77.82/BBL; BRENT (J4) SETTLES USD 0.67 HIGHER AT 82.50/BBL
Oil prices were ultimately firmer on Tuesday in choppy trade amid ongoing Middle East tensions, Saudi production caps, and IMF growth upgrades. The crude benchmarks had been moving lower through the European session amid downbeat European GDP figures, fading a short-lived pop on reports that Saudi Arabia's government has asked Aramco to lower its maximum capacity target by 1mln BPD to 12mln BPD. WTI (H4) and Brent (J4) contracts troughed at USD 75.85/bbl and 80.83/bbl, respectively, in the NY morning, coming on the heels of White House Energy Advisor Hochstein touting a balanced oil market and huge increases in supply from the US, Brazil and Guyana. However, not long after, prices began to reverse higher, gradually sustaining a bid through the rest of the session. There were some tailwinds from the IMF's raising of its 2024 global economic growth forecast to 3.1% from its 2.9% forecast in October. Also, Yemen's Houthi forces announced the group is ready for a long-term confrontation with the US and UK. Furthermore, the US State Department confirmed oil sanctions against Venezuela. There were also more Red Sea shipping cancellations from Maersk, while Reuters reported Kazakhstan has also stopped oil shipments via the Red Sea. Note that the oil bid was capped in late trade after Kataib Hezbollah, the group reportedly responsible for the drone strike on US troops, said it had suspended military operations against US forces, albeit skepticism remains.
INVENTORIES: Energy traders now look to the weekly US energy inventory data, with the private release due later on Tuesday ahead of the official EIA figures on Wednesday. Current expectations (bbls): Crude -0.2mln, Gasoline +1.5mln, Distillates -0.4mln.
Shares:
- SLB (SLB) (-7%),Halliburton (HAL) (-1%), and Baker Hughes (BKR) (-2%) were all weaker after Saudi Aramco announced it would halt its plan to raise its maximum capacity to 13mln BPD from 12mln BPD.
- Marathon Petroleum (MPC) +6% and Helmerich & Payne (HP) +12% after EPS and revenue topped Wall St. consensus.
|
