Oil fell in price by 5% against the background of increased supplies from the Russian Federation and negative data on the US economy
Yesterday, January Brent oil futures fell by 4.9% to $77.4/barrel (-14.7% for the month), and December WTI oil futures fell by 5% to $72.9/barrel. barrel against the background of increased supplies from the Russian Federation, increased production and oil reserves in the USA and negative macroeconomic data from the USA.
Global economic news lowers energy demand and oil prices. Weekly U.S. jobless claims rose by 32,000 to a 2-year high of 1.865 million, while the number was expected to be no higher than 1.843 million, signaling weakness in the labor market. Industrial production in the US fell by 0.7% in October (against expectations of -0.4%), which was the largest decline in the last 4 months.
The increase in oil supplies from the Russian Federation increases the pressure on quotations. According to Bloomberg, during the period from October 9 to November 5, 3.48 million barrels/day were exported from Russian ports, which is almost equal to the 4-month maximum. This confirms the ineffectiveness of the sanctions introduced against the Russian Federation, due to which it continues to receive income for waging war with Ukraine.
On October 18, the USA announced the possible easing of sanctions on oil exports from Venezuela for half a year in exchange for ensuring fair presidential elections in 2024. Analysts believe that this will increase oil supplies to the world market by 200,000 barrels/day.
According to the EIA association, US oil production reached a record 13.2 million barrels per day, and inventories rose more than expected.
Reductions in oil stocks in floating storages support quotations. According to data from Vortexa, volumes of oil, which has been stored on tankers parked for at least a week, fell by 26% to 58.17 million barrels in the period from November 4 to 10, the lowest figure in the last 33 months.
Lower oil prices will increase pressure on vegetable oil prices in the near future.
January palm oil futures on the Malaysian exchange rose 6.1% to 3,998 ringgit/t or $849/t during the week, while December soybean oil futures in Chicago rose 6%, but fell yesterday to 3.2% to $1,136/t (-8.1% for the month) amid forecasts of better weather in Brazil and lower oil prices.
