Oil Prices Set for Small Gains in 2023 According Reuters Survey Respondents
January 3, 2023
The Baker Hughes Rig Count had crude oil rigs down 1 to a total of 621 oil rigs and last year at this time there were 480 oil rigs in operation. Domestic production continues to hang right around the 12 million barrels per day mark.
Energy markets traded higher on Friday as traders covered themselves for the long holiday weekend. As we begin this new week of the new year there will be more traders back to work and the markets can get back to “normal” what every that might be.
Energy prices did trade higher on Friday as the US dollar fell to a six and a half month low and an uptick in holiday travel helped to support prices.
According to a Reuters survey, oil prices are set for small gains in 2023 as a darkening global economic backdrop and COVID-19 flare-ups in China threaten demand growth and offset the impact of supply shortfalls caused by sanctions on Russia.
A source stated that Chevron Corp sent an oil tanker to Venezuela to load the first cargo of crude destined for the United States in nearly four years, with the vessel approaching the South American country’s waters on Friday.
From John Kemp of Reuters. China’s manufacturers reported a severe contraction in business activity in December as coronavirus infections surged following the end of the government’s suppression policy. “The epidemic has had a great impact on the production and demand of enterprises, the arrival of personnel, and logistics and distribution,” according to the National Bureau of Statistics.
From Reuters. The St. Louis Fed said in its report that if 26 states have falling activity within their borders, that offers “reasonable confidence” that the nation as a whole will fall into a recession. Right now, the bank said that as measured by Philadelphia Fed data tracking the performance of individual states, 27 had declining activity in October.
US commercial crude oil inventories (excluding those in the SPR) increased by 700,000 barrels last week. At 419 million barrels , US crude oil inventories are 6% below the five-year average for this time of year. Total motor gasoline inventories decreased by 3.1 million barrels week over week and are 4% below the five-year average for this time of year. Distillate inventories increased by 300,000 barrels week over week and are 7% below the five-year average for this time of year.