Oil prices' second weekly climb of the year

In the first trading session of the week on January 15 (Vietnam time), Brent and WTI oil prices both increased slightly in the context that some major shipping companies are still avoiding passing through the Red Sea after attacks by Houthi forces in response to Israel's war against Hamas.

Global trade fell by 1.3% in November-December 2023, led by a decline in the volume of goods transported within the region.

By the trading session on January 16 (Vietnam time), oil prices were mixed due to the impact of the conflict in the Middle East on crude oil production, prompting investors to take profits.

Entering the session on January 17 (Vietnam time), the USD reached its highest level in a month when investors reduced expectations that the US Federal Reserve (Fed) would cut interest rates next March, causing oil prices to plummet.

Oil prices recorded a weekly increase with Brent crude up about 0.5% and WTI crude up more than 1%. Illustration photo: Oil and Gas Group

The slight fluctuations in oil prices on January 18 (Vietnam time) were affected by the severe cold spell in North Dakota, the third largest oil-producing state in the US. Temperatures below 0 degrees Fahrenheit caused oil production here to decrease by 650,000 to 700,000 barrels/day.

However, China's slower-than-expected economic recovery has limited the upside momentum for oil prices. China's gross domestic product (GDP) growth in the fourth quarter of 2023 was only 5.2%, 0.1 percentage points lower than forecast.

Oil prices jumped on January 19 (Vietnam time) after both the IEA and OPEC forecast increased oil demand this year.

OPEC said that world oil demand is expected to surge by 2.25 million barrels per day in 2024 and increase by 1.85 million barrels per day in 2025 compared to the same period last year.

On the supply side, the organization predicts non-OPEC production will increase by 1.3 million barrels per day in both 2024 and 2025.

Meanwhile, the IEA's monthly report forecast oil demand to increase by 1.24 million barrels per day this year, up 180,000 barrels per day from its previous forecast.

By the last trading session of the week on January 20 (Vietnam time), oil prices increased in the context of the US suffering a shortage of about 30% of oil production in North Dakota due to severe cold weather.

Oil production in the state had previously fallen by about 700,000 barrels per day, and state regulators said it could take a month for production to return to normal levels.

For the week as a whole, Brent crude rose about 0.5%, while WTI crude rose more than 1%. Thus, in the first 3 weeks of 2024, oil prices have fluctuated between 2 weeks of increase and 1 week of decrease.

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