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Michael Kern

Michael Kern

Michael Kern is a newswriter and editor at Safehaven.com and Oilprice.com, 

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Strong Economic Data Boosts Bullish Sentiment in Oil Markets


The bullish case for oil prices was strengthened dramatically this week, with strong U.S. economic data helping to push Brent well past the $80 mark.  

oil prices









Friday, January 26, 2024

The stronger-than-expected performance of the US economy has boosted oil prices to their highest level this year, not many analysts were expecting a 3.3% GDP growth in Q4. Continuous Houthi strikes in the Red Sea and surging product freight rates have added impetus to the bullish cause, and even China’s timid reaching out to Iran to rein in the Yemeni attacks failed to scale back geopolitical tensions. With Brent breaking through the $80 per barrel threshold and reaching $82 per barrel, prices cleared an important psychological barrier. 

White House Asks China to Help with Houthis. According to the Financial Times, the White House has asked China to help rein Houthi rebels attacking commercial tankers in the Red Sea as two Maersk container ships were targeted this week despite US warship escorts. 

TMX Pipeline Eyes April Start. Canada’s $23 billion Trans Mountain Expansion (TMX) pipeline is set to begin line fill by the end of this quarter, with first commercial flows starting from April and ramping up to full capacity by December, easing oil sands’ huge double-digit discounts. 

UAE Mulls African Oil Expansion. The government of Uganda has chosen an investment firm from the UAE, led by a member of the Dubai royal family, to build a 60,000 b/d refinery in the country after a deal with an international consortium fell apart in 2023. 

UK Waits for World’s Most Expensive Nuclear Plant. French nuclear developer EDF announced that the construction of the UK’s Hinkley Point C nuclear plant will cost an extra $13 billion, taking the total to $46 billion, and will be delayed by several years to at least 2029. 

US Refiners Seek Limits to Fuel Credit Market. US oil refiners have asked the Biden administration to restrict participation in the US renewable fuel credit program (RINs), claiming the current EPA mechanisms allow any person to participate, paving the way for manipulation. 

Consolidation Extends into US Midstream Market. US fuel distributor Sunoco (NYSE:SUN) agreed to buy pipeline and terminal operator NuStar Energy in an all-equity deal for $7.3 billion, opening up the logistics and infrastructure segment for the Energy Transfer (NYSE:ET) subsidiary.  

Defying Peers, Chevron Sees A Future in Nigeria. As European peers such as Shell are leaving Nigeria, US oil major Chevron (NYSE:CVX) unveiled a plan to expand its presence in the African country, signing a 20-year renewal on three deepwater leases and acquiring a stake in the OPL 215 block. 

Clean Tanker Freight Hits 4-Year Highs. Freight rates for oil product tankers to Europe hit their highest level since April 2020, with a Persian Gulf-UK Continent voyage via the Cape of Good Hope costing 8.25 million now, up 60% compared to the conventional Suez Canal route. 


Rosneft Refinery Hit by Ukrainian Drones. Less than a week after Ukrainian drones hit a Novatek naphtha tank farm in Ust Luga, the vacuum distillation unit of Rosneft’s (MCX:ROSN) 240,000 b/d Tuapse oil refinery was struck in a new attack, causing a fire.

Copper Starts to Lose Investment Appeal. Hedge fund positioning on copper has swung from a vast net long in early January to the largest net short since mid-2022, to the tune of 25,000 contracts, with investors wary of China’s ailing manufacturing activity and European recession.

Equinor and BP Swap NY Wind Farms. European oil majors BP (NYSE:BP) and Equinor (NYSE:EQNR) are splitting their New York wind farm joint venture, with each assuming full control of their respective wind farms, resulting in a $600 million pre-tax impairment for BP.

Fortescue Hits the Wall in China. Two iron ore cargoes supplied by Fortescue (ASX:FMG) to China have been denied customs clearance due to an ongoing probe, just as the Australian miner is trying to renegotiate a 2024 procurement deal with the state-run iron ore buyer CMRG. 

Chinese Jet Fuel Demand to Hit New Highs. Chinese jet fuel demand is expected to surpass pre-pandemic levels over the upcoming Lunar New Year celebrations, hitting 860,000 b/d, as Chinese travelers are expected to make 80 million domestic flights over that period.

By Michael Kern for Oilprice.com

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  • Mamdouh Salameh on January 26 2024 said:
    A rise of US economic growth to 3.3% in the fourth quarter of 2023 was credited with boosting oil prices when in fact the US economy grew on average in 2023 at around 2%.

    Yet when China's economy grew by 5.5% in 2023, the highest among all major economies, it was talked about by Western media as a slowdown in its economy.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

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