Oil gave way on Thursday amid doubts about the pace of the global economic recovery. U.S. light crude WTI gave up 1% to $52.34 a barrel for the March futures contract on Nymex, while North Sea Brent crude dropped 0.5% to $55.53.
Gold continued its slide, giving up 0.40% at February futures contract on the Comex to $1,837.90, marking its 6th consecutive session of decline, which had not happened for nearly two years, in March 2019. Silver, on the other hand, was propelled 2.1% to $25.92 an ounce (March contract), following a campaign by investors on the social network Reddit. After the day’s close, silver continued to climb, exceeding $26.50 per ounce.
Overall oil prices stayed steady with $50 mark for WTI and $55 for Brent. Thanks to optimistic figures on oil stocks, US WTI crude futures looked marginally better than Brent contracts. The gap between the grades decreased as a result and turned out to be around $3 per barrel.
The decrease in inventories last week was confirmed by figures from the US Energy Information Administration (EIA), with the size of the reduction being greater than the API data indicated. Against the API forecast of 5.3 million barrels, oil reserves decreased by 9.9 million barrels. The decline was attributed to a drop in production by 0.1 million barrels a day to 10.9 million barrels a day, as well as an impressive decrease in net imports of 2.1 million barrels a day. The stocks of oil products showed mixed dynamics, which were not substantially different from the predictions. The use of refineries fell from 82.5 percent to 81.7 percent.
Against the backdrop of the release of the results, prices leaped, but a further deterioration in sentiment on world markets, linked to the dissatisfaction in the statement by the Fed, put pressure on oil and did not make a confident plus to close the trade.
On Wednesday, the Biden administration in the United States revoked new leases on federal property for the extraction of oil and gas and reduced subsidies for fossil fuels. On federal property, approximately 22 percent of American oil and 12 percent of gas is generated. Around the same time, the carbon dioxide emissions share of businesses working on these lands is almost 25 percent. This makes it an essential priority of Biden’s environmental policy to restrict development on federal lands. How higher the pressure on the industry can really be is not yet apparent. Such a deterrent, however, further decreases the chances of a revived expansion of the shale sector and shale oil over-supply. This is a boost for oil markets.