The energy sector is set for a lower start, as oil prices and energy receded modestly following strength...
The energy sector is set for a lower start, as oil prices and energy receded modestly following strength in the broader equity indices after Russian President Vladimir Putin said there were "certain positive shifts" in talks with Ukraine. Risk sentiment improved following the comments and is aiding broader equities while energy and oil move lower in the opposing direction.
WTI and Brent crude oil futures are swinging between gains and losses in early trading on continued concerns about supply disruptions for Russian oil and oil products, but are still on track for their biggest weekly decline since November. Oil prices have pulled back a bit this week on hopes that some producing countries may act to increase supply and fears about escalating bans on Russian oil persist. In the near term, supply gaps are unlikely to be filled by extra output from members of OPEC+ as some OPEC+ producers, including Angola and Nigeria, have struggled to meet their production targets, further limiting the group's ability to offset Russian supply losses. OPEC+ heavyweights Saudi Arabia and the UAE, which both bear grudges against Washington, have snubbed U.S. pleas to use their spare output capacity to tame rampant crude prices which threaten global recession after Russia's invasion of Ukraine. Norwegian state oil company Equinor has stopped trading Russian oil as it winds down operations there in the wake of Moscow's invasion of Ukraine. ~From Marketinsite
Crude Oil: The federal government’s EIA report revealed that crude inventories fell...
Crude Oil: The federal government’s EIA report revealed that crude inventories fell 1.9 million barrels compared to expectations of a 700,000-barrel decrease per the analysts surveyed by S&P Global Platts. Continued strength in refinery demand accounted for the larger-than-expected stockpile draw with the world’s biggest oil consumer even as exports fell and U.S. production remained robust. Total domestic stocks now stand at 411.6 million barrels — 17.4% less than the year-ago figure and 13% lower than the five-year average.
The latest report also showed that supplies at the Cushing terminal (the key delivery hub for U.S. crude futures traded on the New York Mercantile Exchange) decreased 585,000 barrels to 22.2 million barrels.
Meanwhile, the crude supply cover was down from 27.1 days in the previous week to 27 days. In the year-ago period, the supply cover was 40.5 days.
On top of that, a reading of inflation came in at its highest level in about 40-years, underscoring the surge in prices in everything from dry commodities to crude oilCL.1, -2.79%.
The Dow Jones Industrial AverageDJIA, -0.34% closed down 0.3%, S&P 500 index SPX, -0.43% closed down 0.4% and the Nasdaq Composite IndexCOMP, -0.95% ended the session off by about 1%.
