Futures Movers: Oil prices log a yearly rise in volatile 2022


Oil futures ended higher Friday in the last trading session of 2022, posting an annual rise in a year that saw investors weigh supply fears triggered by Russia’s invasion of Ukraine against a wobbly global demand outlook and fears of a potential recession.

Price action

West Texas Intermediate crude for February delivery



rose $1.86, or 2.4%, to close at $80.26 a barrel on the New York Mercantile Exchange. That left the U.S. benchmark up 6.7% in 2022, based on front-month contracts, according to Dow Jones Market data.

March Brent crude

the global benchmark, was flat at $83.46 a barrel on ICE Futures Europe.

Back on Nymex, January gasoline

jumped 3.8% to $2.4595 a gallon, for a 10.4% 2022 gain after hitting an all-time high above $4.27 in June. January heating oil

rose 1.5% to finish at $3.362 a gallon, up more than 44% for the year — its largest percentage gain since 2007.

February natural gas

fell 8.4 cents, or 1.8%, to close at $4.475 per million British thermal units, leaving it up 20% for 2022.

Market drivers

Brent and WTI logged a second annual rise, though both were set to finish well off highs set in March following Russia’s late February invasion of Ukraine. WTI hit a nearly 14-year high above $130 a barrel in early March, while Brent traded just shy of $140.

WTI ended the year well below where it stood on Feb. 23, the eve of Russia’s invasion of Ukraine, at $92.10 a barrel. Brent pulled back from its preinvasion close at $94.05 a barrel.

Crude oil prices have weakened over the second half of the year in part due to fears that aggressive tightening of monetary policy by the Federal Reserve and other major central banks would tip the global economy into steep slowdown. Optimism over China’s relaxation of strict COVID curbs, a factor seen as a weight on crude demand, has been offset by concerns over a surge in infections in the country.

“China continues to be at the center of all things oil. Although widely expected, soaring coronavirus cases have been marginally weighing on prices, but the outlook appears bright given the potential for improving mobility in China. Still, we are heading into next year amidst continued volatility around the commodity macro,” said Stephen Innes, managing partner at SPI Asset Management, in a note.

Innes said markets are likely overly pessimistic about the potential China rebound. “Given the massive reopening multiplier effect from the PBOC (People’s Bank of China) liquidity injections and how quickly mobility can return to trend post-COVID lockdown, we could see a significant oil price liftoff soon,” he wrote.

Oilfield-services company Baker Hughes on Friday said the number of U.S. oil rigs fell by 1 this week to 621. The oil-rig tally was up 141 from the same time last year.

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