Week of Oil News Pouring

Remaining the crucial element of the global economy despite other sources of energy and eco-agenda, oil is one of the few trading assets, which movements are mighty enough to have a knock-on effect across markets. This week is coincidently full of major political and economic events that will impact oil prices to an unknown scale. Underlining the top news and reminding of the opportunities, the article below.
 

Today, February 1, 2023, will see another gathering of the key energy-related ministers from the group comprising the Organization of the Petroleum Exporting Countries (OPEC) and associated states, more commonly known as OPEC+. Although experts and insiders expect no big surprises from the meeting due to the general market weakness and uncertainty, one must be aware of Russia and the statements of Russian representatives: the dominant player of the OPEC (together with Saudi Arabia), Russia is able to shake the energy prices significantly with even a hint.

Besides, Russia’s heavily discounted crude oil supplies to China and India remain stable and even growing in view of the recently imposed G7’s price cap of $60 per barrel (as seen from the West, whereas no exact numbers are available). Thus, major oil-consuming markets are pretty saturated even without the interference from the Persian Gulf countries, which cannot but push the oil prices down: benchmark WTI and Brent fell $5-6 in recent days and later bounced to fight just a couple of bucks back.

Secondly, to make the fortunes of Russia even bitter, there are more price caps by G7, coming into effect on February 5, 2023, this time on Russian refined oil products. While the effect on oil prices is dubious here (rather positive than negative), it will definitely play into the hands of freight services providers…

We can’t but ignore the U.S. Federal Reserve interest rate decision: US Federal Open Market Committee (FOMC) statement and press conference later on commence today too (both events take place on the same day, as usual). Officials are expected to raise rates by 25 basis points, followed by half-point increases by the European Central Bank and the Bank of England. Normally, the rise of the rate makes the currency more expensive and thus any asset, estimated in the given currency (including energies), becomes cheaper.

Adding to the bullish chances of oil, however, the crude oil inventories’ forecast (commercial and state-owned, to be announced today also) oversees the drop of US inventories by several hundred thousand barrels. Insignificant in a normal situation, these hundreds can bring storms to the market.

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