Oil Prices Recover Modestly After Previous Day’s Decline

by Roman Cheplyk
Thursday, February 1, 2024
Oil Prices Recover Modestly After Previous Day’s Decline

On Thursday, February 1, oil prices experienced a moderate increase following a significant drop the previous day, triggered by a report of rising US inventories

April Brent crude futures on the London ICE Futures exchange were quoted at $80.84 per barrel, marking a $0.29 (0.36%) rise from the previous session's close. On Wednesday, these contracts had declined by $1.95 (2.4%), closing at $80.55 per barrel.

Similarly, March WTI crude futures on the New York Mercantile Exchange (NYMEX) saw a slight increase of $0.3 (0.4%) to $76.15 per barrel. The previous trading session had concluded with these contracts down by $1.97 (2.5%), at $75.85 per barrel.

January witnessed the first monthly rise in oil prices in four months, driven by Houthi attacks on vessels in the Red Sea and the subsequent retaliatory actions by the US and its allies. Over the month, Brent crude advanced by 6.1%, while WTI crude increased by 5.9%.

The market's attention is currently focused on potential US responses to a recent drone attack on a US base in Jordan, which resulted in the deaths of three American soldiers. The possibility of an escalation in regional conflict remains a concern.

A report from the US Department of Energy indicated an unexpected rise in oil stocks in the country, along with an increase in production, adding to the cautious sentiment in the market. Commercial oil inventories in the US climbed by 1.23 million barrels to 421.91 million barrels last week, contrary to the anticipated decrease forecasted by analysts.

US oil production has also seen an uptick, surpassing 13 million barrels per day (b/d). In response to the transportation of Russian oil above the established price cap of $60 per barrel, the US Treasury has imposed sanctions on at least 18 vessels operated by an Emirati company.

As the market awaits further developments, including the upcoming US data on energy stocks, oil prices have shown only modest fluctuations, with traders closely monitoring the situation for any signs of significant movement.

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