Energy
Wednesday, April 24th, 2024 2:18 pm EDT
Key Points
- U.S. crude oil prices dropped below $83 a barrel after a recent 2% rally, with market focus shifting to supply and demand fundamentals amid diminishing concerns about conflict between Israel and Iran.
- Energy prices as of the report include West Texas Intermediate (WTI) at $82.99 a barrel (down 0.44%), Brent at $87.14 a barrel (down 0.32%), RBOB Gasoline at $2.72 a gallon (down 0.1%), and Natural Gas at $1.78 per thousand cubic feet (down 1.6%). Year to date, U.S. crude oil has risen over 15%, while the global benchmark Brent has increased by about 14%.
- The U.S. Senate passed a foreign aid package expanding sanctions against Iranian oil, targeting ports, vessels, and refineries that accept its crude exports. However, President Biden can waive sanctions for national security reasons, potentially mitigating their impact on the oil market. Analysts believe the Biden administration is unlikely to strictly enforce sanctions, considering their potential to raise global crude prices and U.S. retail gasoline prices during an election year.
U.S. crude oil prices dipped below $83 a barrel, reversing a recent 2% rally, as traders awaited the latest U.S. petroleum inventory data. With the threat of war between Israel and Iran fading, market focus has shifted back to supply and demand fundamentals. The West Texas Intermediate (WTI) June contract stood at $82.99 a barrel, down 0.44%, while the Brent June contract was at $87.14 a barrel, a decrease of 0.32%. Despite the decline, both benchmarks have seen significant year-to-date increases, with U.S. crude up over 15% and the global benchmark up around 14%. Additionally, RBOB gasoline futures for May were at $2.72 a gallon, down 0.1%, and natural gas for May was at $1.78 per thousand cubic feet, down 1.6%, with gasoline futures seeing a year-to-date increase of more than 29% and natural gas down about 29%.
The U.S. Senate passed a foreign aid package expanding sanctions against Iranian oil, targeting ports, vessels, and refineries that accept the Islamic Republic’s crude exports. However, President Joe Biden has the authority to waive sanctions for national security reasons, potentially limiting their impact on the oil market. Geopolitical risk service Rapidan Energy believes the Biden administration is unlikely to strictly enforce sanctions, especially considering the upcoming election year, which could drive up global crude prices and U.S. retail gasoline prices.
Analysts suggest that a prolonged rally above $95 a barrel for Brent crude is improbable at the moment. Factors contributing to this assessment include uninterrupted oil flow from the Middle East despite conflicts, growing production in the U.S., persistent inflation, and OPEC’s substantial spare capacity to address supply emergencies. Tamas Varga, an analyst at oil broker PVM, emphasizes that recent price fluctuations, such as Brent’s decline from $92/bbl to below $86/bbl, are largely influenced by factors like production growth and inflation rather than geopolitical tensions.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/04/24/crude-oil-prices-today.html
