Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Oil slides on Friday, but climbs for 5th week on supply concerns

CommoditiesJan 21, 2022 03:20PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Oil and gas tanks are seen at an oil warehouse at a port in Zhuhai, China October 22, 2018. REUTERS/Aly Song/File Photo

By Scott DiSavino

NEW YORK (Reuters) -Oil prices slid for a second day in a row on Friday, pressured by an unexpected rise in U.S. crude and fuel inventories while investors took profits after the benchmarks touched seven-year highs earlier in the week.

However, both crude benchmarks rose for a fifth week in a row, gaining around 2% this week. Prices were up more than 10% so far this year on concerns over tightening supplies.

Brent futures fell 49 cents, or 0.6%, to settle at $87.89 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 41 cents, or 0.5%, to settle at $85.14.

Earlier in the week, both Brent and WTI rose to their highest levels since October 2014.

"The latest pullback is most likely due to a combination of pre-weekend profit-taking and the absence of fresh bullish catalysts," said PVM analyst Stephen Brennock, noting Thursday's bearish data from the Energy Information Administration (EIA).

The EIA reported the first U.S. stock build since November and gasoline inventories at an 11-month high, against industry expectations.

"Energy traders were not surprised to see the oil price rally slow down," said Edward Moya, senior market analyst at OANDA. "WTI crude fell after a surprise build with U.S. stockpiles and following a bloodbath on Wall Street that sent risky assets into freefall."

"Crude prices may not have a one-way ticket to $100 oil, but the supply-side fundamentals certainly support that could happen by the summer," Moya said.

Other analysts also said they expect the current pressure on prices to be limited owing to supply concerns and rising demand.

OPEC+, which groups the Organization of the Petroleum Exporting Countries (OPEC) with Russia and other producers, is struggling to hit its monthly output increase target of 400,000 barrels per day (bpd).

In the United States, energy firms cut oil rigs this week for the first time in 13 weeks. [RIG/U]

Tensions in Eastern Europe and the Middle East are also heightening fears of supply disruption.

Top U.S. and Russian diplomats made no major breakthrough at talks on Ukraine on Friday but agreed to keep talking to try to resolve a crisis that has stoked fears of a military conflict.

"With low spare OPEC+ capacity, low inventories and geopolitical tensions rising," analysts at Bank of America (NYSE:BAC) said they expect to see Brent at around $120 a barrel in mid-2022.

UBS expects crude oil demand to reach record highs this year and for Brent to trade in a range of $80-$90 a barrel for now.

Meanwhile, Morgan Stanley (NYSE:MS) has raised its Brent price forecast to $100 a barrel in the third quarter, up from its previous projection of $90.

On the demand side, quarterly results of energy firms Schlumberger NV (NYSE:SLB) and Baker Hughes Co both beat expectations as higher crude and natural gas prices drove demand for their services.

Oil slides on Friday, but climbs for 5th week on supply concerns
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (7)
Jakub Menderski
Jakub Menderski Jan 21, 2022 12:59PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Ukraine with Russia in the region where are one of the largest deposits of oil in the world. Invasion on Ukraine will happen and it is not long perspective but matter of week or two
eduff duff
eduff duff Jan 21, 2022 8:55AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Hahaha what fall? So funny you reporter
MWAN WAN
MWAN WAN Jan 21, 2022 7:34AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
supply concern is artificial
Ying Yu
Ying Yu Jan 21, 2022 4:55AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Crash is ahead as the institution sold their positions to immature investors at the most expensive price of 7 years. The institutions will not come back until it reach half price of 89.
Ac Tektrader
Ac Tektrader Jan 21, 2022 3:26AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
george and bhagwan such negative posts, you must be losing a lot of money trading these markets.
George Jetson
George Jetson Jan 21, 2022 1:06AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
this writer is almost as bad as the "futures" writer
Bhagwan Dass
Bhagwan Dass Jan 20, 2022 11:48PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
fed fail in us.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email