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As of 6:40 p.m. Vietnam time, North Sea Brent oil delivered in February 2023 has risen to $79.88/barrel (+0.10%).
Similarly, WTI for January delivery fell to $76.10 per barrel (-1.21%).
The two global crude benchmarks are benefiting from “new optimism about China’s easing of its COVID-19 epidemic prevention policy”, as well as from “news that the US has been affected,” said Energi Danmark analysts. will start buying crude to fill their strategic reserves.”
Indeed, to reduce fuel prices, US President Joe Biden opened the national strategic stockpile several times over a year. Currently, oil reserves are reaching their lowest level since January 1984.
According to a press release from the US Department of Energy, published on December 16, the US will first focus on buying 3 million barrels of crude oil.
But “recession fears continue to hover overhead,” which has limited the black gold’s gains, analysts at Energi Danmark note.
A restart of demand in China remains uncertain, with the country facing a wave of Covid-19 infections linked to the easing of epidemiological restrictions. Therefore, demand resilience is “unpredictable”.
“Disturbing forecasts” about this new wave of the epidemic “are weighing heavily on China’s short-term economic forecast,” said Stephen Innes, an analyst at SPI.
Meanwhile, futures for natural gas on the Dutch exchange TTF fell 3.7%. The transaction price currently stands at 104,445 euros/MWh.
“The most recent cold snap has ended and the weather has been milder across Europe, with temperatures above normal,” said Energi Danmark analysts. This has helped limit the need for gas consumption at this time.
On December 19, EU member states adopted a temporary mechanism to limit the wholesale price of gas.
The Kremlin continues to call the policy of ceiling pressure “unacceptable”.
For DNB analysts, this policy basically “will ensure that the TTF price is tied to the LNG price in the world market, it is not an absolute ceiling”.
In general, this is a cap that can be changed, with many conditions necessary for the mechanism to be activated: the price of natural gas TTF for delivery next month must reach 180 euros/MWh for 3 consecutive days, and must be at least 35 euros higher than the international LNG price.