The price of January futures for Brent oil in trading on the London ICE Futures exchange fell by 2.75%, falling to $82.84 per barrel as of 17:35 Moscow time. A barrel of Brent oil costs less than $83 for the first time since August 25, 2023.
The price of futures for WTI oil for December delivery fell on November 7 on the New York Mercantile Exchange by 2.70% to $78.64 per barrel. This grade is trading below $79 for the first time since August 25, 2023.
“The geopolitical premium has almost completely disappeared, which, in our opinion, is premature, since the risks of escalating the conflict in the Middle East have still not gone away,” PSB managing expert Ekaterina Krylova commented on the fall in oil prices.
Head of Commodity Strategy at Saxo Bank A/S Ole Hansen believesthat traders’ interest in geopolitical issues is falling amid a decline in short-term demand expectations. According to Reuters, China’s crude oil imports showed strong growth both year-on-year and month-on-month in October, but China’s overall merchandise exports decreased faster than expected. Falling exports from China are putting pressure on the entire global economy. The expected reduction in oil refining volumes at Chinese refineries in November-December may also limit demand for oil and exacerbate the fall in prices for this product.
Europe’s economic slowdown is affecting manufacturing, reducing demand for diesel and naphtha. About it reports Bloomberg, citing Wood Mackenzie Ltd. At the same time, according to consulting firm OilChem, cited by Bloomberg, China’s state-owned oil refineries may reduce production volumes due to decreased profitability.
A day earlier, oil prices, on the contrary, showed upward dynamics. The growth driver was the decision of Russia and Saudi Arabia to extend measures to voluntarily reduce oil supplies to the world market until December. Saudi Arabia upheld the decision to reduce oil production by 1 million barrels per day, and Russia by 300 thousand barrels per day.
In “BCS World of Investments” indicated, that nothing is yet known regarding deliveries in 2024. “A number of experts are already hypothesizing that the cuts will be extended in one form or another, since the first quarter of 2024 is traditionally considered a season of weak demand. Concerns also remain amid high rates in the global economy,” analysts explained.
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2023-11-07 14:48:34
