Oil growth projections hold steady despite market jitters
Exxon Mobil's BLADE unit went online March 16 and will increase fuel production from the Beaumont refinery by at least 65 percent. West Texas Intermediate, the U.S. benchmark for the price of oil, hovered in the upper $60 range last week, a low not seen since late 2021. The Energy Department expects it to average $77.10 per barrel this year.
That leaves the market, including oil prices, turning to the U.S. Federal Reserve, which meets Thursday to consider its next steps in the fight against inflation. “It’s clear sentiment is running ahead of reality, similar to when oil prices spiked to $130 per barrel after the start of the war in Ukraine, only for it to slide back down and find a new equilibrium that was based more around supply and demand fundamentals — which despite the contagion jitters really haven’t changed too much,” Hickin said.
“It's a tale of two markets,” he said. One, where fundamentals on supply and demand are sound, but another where “the banking crisis is reducing confidence causing liquidation in oil and gas.” “While the oil market is likely to remain volatile in the near term, we still expect rising Chinese crude imports and demand, and lower Russian production, to lift prices over the coming quarters,” they wrote.What happens this week will center on the Fed’s meeting on Thursday. Apart from the focus on the finance sector, both retail and wholesale prices are on the decline, suggesting current policy is working.
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