The global price of a barrel of oil has declined… and Brent crude is under $88

The global price of a barrel of oil has declined… and Brent crude is under $88
The global price of a barrel of oil has declined… and Brent crude is under $88
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The price of a barrel of oil declined globally during trading today, Tuesday, January 24 (2023), amid fears of a slowdown in the US economy.

The oil markets had started the Asian trading on the rise, amid hopes for a recovery in demand for fuel from China, the largest importer in the world.

The global price of a barrel of oil today

By 07:59 a.m. GMT (10:59 a.m. Mecca time), the price of benchmark Brent crude futures – for delivery in March 2023 – fell by 0.24%, to $87.98 a barrel.

The price of US West Texas crude futures – delivery in March 2023 – decreased by a marginal rate of 0.06%, to $81.57 a barrel, according to data viewed by the specialized energy platform.

And oil prices ended their trading, yesterday, Monday, January 23, on the rise, with the prospects for an economic recovery in China.

Oil market conditions

Analysts at Goldman Sachs said that commodities such as crude oil, refined petroleum products, liquefied natural gas and soybeans are set to benefit from a rebound in Chinese demand.

The price of a barrel of oil globally in physical markets in 2023 began to rise, as China, which is no longer holding back due to epidemic controls, shows signs of more buying, and traders fear that sanctions imposed on Russia may lead to a tightening of supplies.

Oil storage tanks in America – Photo from Reuters

US economy

“Besides, the dollar is hovering around a multi-month low, which supports the price of a barrel of oil globally,” said oil market expert Sugandha Sachdeva.

The dollar index hovered near a 9-month low against the euro, and pared recent gains against the yen, as traders continued to gauge the risk of a US recession and the path of Federal Reserve policy.

A weaker dollar makes commodities denominated in the greenback, including oil, cheaper for buyers using other currencies.

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OANDA analyst Edward Moya said the economy in the US “can still turn around and some energy traders remain skeptical about how quickly Chinese demand for crude oil will bounce back this quarter.”

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demand for oil

Demand for products pushed up oil and refining market margins, as data shows refining margins rose, to $42.18 a barrel on Monday, the highest level since October.

Investors returned to oil futures and options at the fastest rate in more than two years, as concerns about a downturn in the global business cycle eased, although flash PMI data, due for release on Tuesday, is expected to show contraction.

This week, traders are watching for more business data that could indicate the health of global economies during earnings reporting season.

US oil stocks

In terms of inventories, a preliminary Reuters poll showed that US stocks of crude oil and gasoline are expected to rise last week, while distillate stocks fell.

The poll was conducted ahead of reports from the American Petroleum Institute, an industry group, which is scheduled for 09:30 p.m. GMT (12:30 a.m. Mecca time) on Tuesday, and the Energy Information Administration, the statistical arm of the US Department of Energy, at 9:30 p.m. 03:30 PM (06:30 PM Mecca time) tomorrow, Wednesday.

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