Oil closes lower, after volatility, with an eye on inventories and reserves

Oil contracts closed lower in the futures market this Thursday (20) after showing volatility throughout the session. On the operating tables’ radar were the data on oil inventories in the United States and the possibility of the country accelerating the release of strategic reserves.

Brent crude for March was down 0.07% ($0.06) to $88.38 at $88.44 a xxxx on the Intercontinental Exchange (ICE). WTI for the same month dropped 0.35% (US$ 0.25), at US$ 85.55 a barrel, on the New York Mercantile Exchange (Nymex).

In the United States, the Department of Energy (DoE) reported that oil inventories rose by 515,000 barrels last week, contrary to analysts’ expectations of a drop. The reaction of assets, which rose at the time of disclosure, was marginal.

During the day, however, they lost their breath. At the same time, the dollar advanced against rivals, which tends to make the price of commodities more expensive for holders of other currencies.

Even today, in an interview with Bloomberg TV, White House National Economic Council director Brian Deese said the US will work to accelerate the release of strategic oil reserves. “This is currently ongoing,” he said.

With recent supply issues, Capital Economics has revised its forecast for oil assets. In the consultancy’s assessment, the new scenario suggests that oil prices should not fall as previously predicted.

“As a result, the door to more flexible fiscal policy in the Gulf will remain open for a little longer than we anticipated,” says James Swanston, Middle East and North Africa economist.

Brent is now expected to end 2022 at $70 a barrel and 2023 at $65 a barrel. Previously, projections were $60 and $55 per barrel, respectively.

The main driver of this change is the consideration of a lower growth in supply by the Organization of Petroleum Exporting Countries and allies (OPEC+), as Russia and some of the smaller producers in the group, such as Angola and Nigeria, “struggle to meet their quotas”. ”, says Capital.