Today is the last day of the Spring Festival holiday. At the same time, oil prices may also face another increase, because before the holiday, the oil price has been calculated to have increased by 210 yuan/ton, and the price of the crude oil referenced during the holiday has also increased compared with before the holiday. The increase in oil prices calculated after the holiday may be further expanded, which will increase the possibility of an increase in oil prices on February 3.
Crude oil prices gave up most of their gains the day before as weak financial markets reduced confidence in the U.S. economic outlook and energy demand. However, they were supported by a lower-than-expected increase in crude oil inventories announced by EIA on Wednesday. In addition, the U.S. Energy Information Administration gasoline supply increased more than expected last week to a nine-month high, which also dragged down crude oil prices.
Worries about the U.S. economy were bearish for crude oil prices, as warnings from several major technology companies about future profits stoked concerns about an overall slowdown in the U.S. economy, which would curb energy demand.
Representatives from OPEC+ said the group will keep its crude oil production target at current levels when it meets on February 1 as they await clarity on a recovery in oil demand.
The chairman of Libya's National Oil Company said on January 23 that the country's state-owned National Oil Company and Eni Group will sign a production agreement to spend US$8 billion to produce about 850 million cubic feet per day of oil from two offshore gas fields in the Mediterranean Sea.
Eni already produces natural gas from Libya 's Wafa and Bahr Essalam fields, operated by Mellitah Oil & Gas, a joint venture between Italian state oil company and Italian state-owned oil company Petrolia. Libya lifted restrictions on an exploration and production agreement in December, luring international oil companies back to explore for gas and oil, especially offshore.
Libya's recent production recovery has been hampered by a lack of funds and aging infrastructure. The country is eager to expand the presence of international oil companies. Libya also hopes to attract foreign investment to increase oil and condensate production from the current 1.255 million barrels per day to about 2 million barrels per day in three to five years.
Libya's oil output has grown steadily since last summer, to 1.17 million barrels per day in December, according to Platts' latest survey. Libya has been rocked by political instability, with governments in the west and east vying for control of the country and its lifeblood oil industry.
Intermittent disruptions in operations at Libya's main oil ports and fields due to internal reasons prompted NOC to announce a crude oil export interruption for several months in 2022. Over the past decade, Libya's aging oil facilities have been damaged due to internal conflicts and terrorist attacks.
The U.S. Commodity Futures Trading Commission report shows that as of January 10, New York crude oil futures speculative net long positions held by money management institutions (mainly hedge funds) and other large trading people decreased by 9.8% from the previous week to 205,236 lots, setting a new low in the past seven years since February 2016.
Oil prices fell by more than 8% in the first week of 2023, mainly due to concerns about the impact of the economic slowdown in China, the United States and Europe. However, oil prices rebounded by more than 8% last week, due to expectations that China's full opening up will drive demand. In the first two weeks of this year, crude oil prices fell slightly by 0.5%.
