Latest oil trends: Brent crude oil prices steadied around $88 a barrel on Wednesday after rallying in the previous session on a surprise fall in U.S.

Latest oil trends: Prices rally, traders eye new Namibia deposits!

Brent crude oil prices held steady in the latest oil trends. Oil moved close to $88 a barrel on Wednesday, after a rally the previous day, spurred by a surprise drop in US crude inventories and shrinking business activity in the US, the world’s biggest oil consumer.

Brent crude futures fell 35 cents, or 0.4%, by 1230 GMT to $88.07 a barrel, while US West Texas Intermediate crude futures lost 47 cents, or 0.6%, to $82.89.

Latest oil trends: Modest pullback

The modest pullback scaled back some of the 1.6% gains Brent saw the day before, on the back of a weaker US dollar and easing concerns over escalating Middle East conflicts – part of new oil trends.

Meanwhile, a Goldman Sachs analysis read: ‘A perceived de-escalation between Iran and Israel could potentially lead to a reduction [in] the geopolitical risk premium of $5-10 a barrel in the near-term,’ adding that $90 per barrel for Brent set a ‘tentative ceiling’ in the latest oil news.

Latest oil trends: US business cooled

From an economic perspective, US business activity cooled in April to the softest pace in four months, according to S&P Global’s flash Composite PMI Output Index, which fell to 50.9 from 52.1 in March.

The slowdown has implications for the US due to raising the odds of a Federal Reserve rate cut that could juice economic growth and, in turn, demand for oil, which is one of the latest oil trends.

In Europe, business morale in Germany rose far more than expected in April, bolstering hopes that the continent’s biggest economy might be on the rebound, which is the latest sign that oil is on the mend.

As far the inventory level is concerned, U.S. crude stockpiles dropped by 3.237 million barrels for the week ending on 19 April, well below the expected rise of 800,000 barrels by the latest Reuters poll, which is also a major determinant in the recent oil price.

Traders await for official report of oil and product stockpiles.

At the same time, geopolitical anxieties still simmer, with the ongoing Israel-Hamas conflict seeing major military action reported even as the latest oil trends creep into the picture.

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Another factor behind the latest oil trends might have been a huge, unanticipated drop in US crude oil inventories, the Energy Information Administration (EIA) said in its report on Wednesday.

While the Reuters poll of analysts predicted nearly eight times as much of an increase in crude stocks — 825,000 barrels — the number actually fell by 6.4 million barrels, ending at 453.6 million barrels as of 19 April.

This big draw of crude inventories (notably, stocks at the Cushing, Oklahoma delivery hub, dropped 659,000 barrels) helped propel US crude futures up 12 cents after the EIA data were released.

The unexpected drawdown is one of the best ways to gauge the latest oil trends given its potential impact on the market.

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Meanwhile, gasoline stockpiles dropped by 600,000 barrels to 226.7 million barrels in the latest week, smaller than the original market forecast for a 1.8 million-barrel decline, which helped push US gasoline futures up 0.5%, according to Front End of the Curve.

Meanwhile, stockpiles of distillates – including diesel fuel and heating oil – increased, at odds with the expected dip. Stockpiles grew by 1.6 million barrels to 116.6 million barrels, compared with forecasts for a 1.1 million-barrel decrease.

Higher distillate inventories could be the beginning of critical changes in the latest trend of oil, which appears poised to make its mark in the commercial and residential heating sectors.

Further details from EIA’s report showed net US crude imports were down 417,000 barrels a day last week; refinery crude runs were down 42,000 barrels a day; and refinery utilisation rates edged higher by 0.4 percentage points.

With all the moving parts involved, it’s a wonder how any one of us can put together a concise report of the latest oil trends in the oil market these days.

The weekly data from the EIA is like a health report of the most precious commodity on earth, showing how it’s functioning – or not – and why it is doing what it is doing. Analysts and traders tasked with the job of monitoring the pulse of the latest oil trends in the oil market rely on this daily influx of compelling data from the EIA.

Political and logistical considerations are influencing the emergence of new oil trends as Ukraine, whose energy infrastructure has been repeatedly assaulted in the past month by Russian missiles and drones, increased electricity imports by about 50% on Wednesday, due to cold, mostly cloudy and windless weather.

This increase is part of the daily fluctuations in imports as the country adapts to the wide-ranging disruptions that are the new normal as a result of the war.

Early in March, following a spate of attacks on Ukraine’s energy systems on 18 and 24 March, the country drastically increased its electricity imports and stopped exporting electricity. The attacks continued in April with a devastating assault on the grid on 24 April.

The country’s energy ministry said imports would climb to 13,764 megawatt hours (Mwh) on Wednesday, from 9,298 Mwh on Tuesday and 7,858 Mwh on Monday.

Power is coming from Romania, Slovakia and Poland.

This ad hoc shake-up in energy supply lines are indicative of a larger pattern in the energy world in recent weeks, with geopolitical events being a greater determinant of policy and practice than any other factors.

The ministry indicated that it is not planning to export any power, while the national power grid operator Ukrenergo has also said that it will introduce compulsory cuts in electricity supplies to business consumers in the evening, in order to even out peak periods in demand, on a national scale.

The restrictions will be applied throughout the whole of Ukraine, but will ensure that special vital infrastructure facilities and defence enterprises will not be subject to power curtailments.

In the face of these dangerous reductions in supplies, with energy savings measures being introduced in crisis conditions, it is clear that these measures are among the latest adaptations to the newest trends in oil.

Oil majors are eyeing Namibia, following its own steps to become a new mega-frontier for oil, with its recent offshore finds touted as some of the largest of the century In line with the major new wave of oil discoveries, Namibia has been identified as the key area for exploration following a series of big finds by TotalEnergies and Shell.

The country is fast-tracking itself towards its first oil production, with TotalEnergies’ mega-field Venus set to go online around 2029/2030, according to Namibia’s petroleum commissioner Maggy Shino.

Meanwhile, to move the ball further down the pitch, Portugal’s Galp Energia announced the discovery of at least 10 billion barrels of oil equivalent in the Mopane field, deep in the Orange Basin, the least-explored of the three offshore basins in Africa’s most southwestern country.

Vast areas of this basin are still unexplored. ‘It’s a very attractive find,’ says James Parr, vice president for new ventures exploration and development at Woodside Energy.

‘You could say it’s the best barrel that’s been found, in terms of lowest carbon barrel, but probably not the last.’ As important as is the oil, the gas reserves were said to be much bigger Still, the industry must transition away from fossil fuels.

The data is still being analysed before a decision is made if they should drill in PEL 87 offshore Namibia, Parr added, speaking from an energy conference earlier this month.

A clean energy transition must be led with awareness of Namibia’s energy poverty and must get the country to a position of net zero, said the country’s energy minister, Tom Alweendo, also speaking at a conference last month.

Moving forward, the US oil major Chevron is gearing up to start drilling in Namibia this year, and Exxon Mobil will begin in 2025. Namibia is becoming increasingly important to the latest of the oil trends.

The same is true of the Okavango region, where Reconnaissance Energy Africa is planning a multi-well drill campaign. The latest of the oil trends is still expanding.

Most stock markets in the Gulf declined on Wednesday as military actions in Gaza escalated, with more strikes by Israel announced and further evacuations ordered in northern parts of the enclave.

Regional volatility with latest oil trends – oil futures price is down more than 40% from recent highs – has also affected the financial markets.

Saudi Arabia’s benchmark index fell 1% on the back of a broad selloff, while big-cap shares such as ACWA Power and Saudi National Bank dropped 3.4% and 1.2% respectively.

Saudi markets reflect broader trends.

Geopolitical pressures and the latest signals from the oil market, which suggest oil prices are about to plummet, mean Saudi Arabia’s economic growth this year will be lower than was previously assumed, slowing its recovery from its worst recession in decades.

The market index on Abu Dhabi went down by 0.1%. Brent oil prices slipped by 10 cents to $88.02 after a surprise fall in US crude stocks and lower business activity in the US, which is the world’s largest oil consumer.

This is yet another major development in the latest trends, affecting the sentiments of the market within the region.

The Qatari benchmark meanwhile managed a 0.5% retreat, with Qatar Islamic Bank dropping 1%.

Outside the Gulf, Egypt’s blue-chip index slipped by 3.2%, dragged down by losses across most of its constituents including its largest lender Commercial International Bank.

Consequently, Gulf stock movements are predominantly informed by the latest oil trends and geopolitical developments in the region, which helps to explain a flighty investment climate at present.

Unless or until the situation changes, it will likely continue to dominate regional market movements.

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