Crude Oil Market Trading: WTI at $76.47 and Brent at $80.75 as US Gasoline Demand Hits Two-Decade Low
Crude oil markets are off to a shaky start this week, grappling with renewed concerns about demand in both China and the United States. West Texas Intermediate (WTI) fell to $76.47, while Brent was trading at $80.75, a significant drop from early-week trading.
Downward pressure on oil trading platforms intensified with reports predicting a possible drop in US gasoline demand, hitting its lowest point in two decades next year. Additionally, Chinese refiners have ordered reduced volumes of Saudi crude for December, adding to market anxiety.
Crude Oil Forum: Mixed Signals on China Composite Market Concerns
US gasoline demand expected to plummet; Chinese refiners look to reduce Saudi crude volumes
New economic data from China contributed to the prevailing bearish sentiment, with October consumer prices seeing a decline. This decline suggests lower demand in the world’s second-largest economy, raising concerns about slower-than-expected economic growth.
While earlier fears of supply disruptions due to the conflict between Israel and Hamas have eased somewhat, the market remains cautious. Despite Iran’s warning of an escalation of the conflict, investors are now more focused on sluggish demand in the United States and China, overshadowing geopolitical tensions.
Potential supply disruptions eased amid Gaza war
Analysts warn against excessive liquidation
Analysts at Nissan Securities noted that the recent liquidation of liters of oil could be exaggerated. While they acknowledged near-term tightness in fundamentals, they highlighted factors such as rising Russian oil exports and weakening refinery margins as contributing to a more nuanced market outlook.
Major oil exploration and production companies reported a modest 0.92% growth in their aggregate net profit during the September quarter. Despite an increase in sales production, aggregate revenue faced a decline of 0.44% due to challenges posed by volatile crude oil prices.
Mixed fortunes for industrial metals in recent trading
Base Metals End Lower Amid Fed Interest Rate Statements
Industrial metals experienced a slowdown in recent trading sessions, influenced by signals from the US Federal Reserve indicating the need for higher interest rates. LME 3m copper prices fell more than 1%, while nickel prices led the decline with a 3% drop.
LME collateralized aluminum stocks saw a significant increase, indicating a change in market dynamics. Meanwhile, weekly base metal inventories in China presented a mixed picture, with copper seeing outflows, but aluminum and zinc seeing increases.
Oil market anticipation: all eyes on OPEC and IEA reports
Brent starts the week soft, awaiting monthly data
ICE Brent started the week on a cautious note, hovering around $82 a barrel, awaiting crucial monthly oil market reports from OPEC and IEA. These reports are expected to provide information on the physical market conditions and balance of the crude oil trading market.
Amid market uncertainties, reports suggest Russia could lift remaining restrictions on gasoline and diesel exports as domestic fuel supplies improve. Additionally, Kuwait’s Al-Zour refinery, one of the largest in the Middle East, is gradually restarting operations after technical problems forced a temporary suspension.
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