Oil prices fell during trading today, Friday, September 29 (2023), continuing to hemorrhage losses for the second session in a row, amid fears of an economic recession that may limit demand.
Despite the decline, crude prices are heading towards achieving gains of 2% this week, driven by scarcity of US supplies and expectations of strong demand for fuel in China during the Golden Week holiday.
Oil prices ended trading yesterday, Thursday, September 28, with a decline of about 2%, with investors balancing fears related to the lack of supplies against growing expectations that the major Western economies will keep interest rates high for a longer period to address inflation.
Oil prices today
By 06:29 AM GMT (09:29 AM Mecca time), standard Brent crude futures – November 2023 delivery – fell by 0.35%, reaching $95.05 per barrel.
On the other hand, US West Texas Intermediate crude futures – November 2023 delivery – rose by 0.02%, reaching $91.73 per barrel, according to figures monitored by the specialized energy platform.
Oil prices received support this week from a decline in oil inventories in the United States by 2.2 million barrels, during the week ending September 22, 2023, bringing the total to 416.3 million barrels, according to data from the US Energy Information Administration, issued on Wednesday.
Oil price analysis
After a nearly 30% jump in oil prices during the third quarter of this year to their highest levels in a year, analysts are waiting to see if Saudi Arabia, the largest oil producer, might look to increase supply.
ING analysts said in a note to clients: “Brent crude struggled to hold on to the gains it made in the first part of the trading session… There is likely a reluctance among participants to rise too much at the moment with the market clearly in the saturation zone.” “Purchasing.”
A platform in an oil field in Argentina – photo from Reuters
They added: “There is also potential concern that OPEC+, and specifically Saudi Arabia, could start easing cuts earlier than planned if oil prices rise too much,” Reuters reported.
A ministerial committee of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, is scheduled to meet on October 4.
“Next week’s OPEC meeting will be a major market update with the likelihood of a reduction in voluntary supply cuts from Aramco increasing,” National Australia Bank analysts said in a note to clients.
Demand for oil
Improving macroeconomic data from China, the world’s largest oil importer, coupled with strong demand for fuel as the country begins the week-long Golden Week holiday on Friday, capped the decline in oil prices.
“Increased international travel over the Golden Week holiday is boosting Chinese oil demand,” ANZ analysts said in a note to clients.
Domestic travel is also expected to boost demand, with data from flight booking apps showing the average number of daily flights booked is a fifth higher compared to Golden Week in 2019, before coronavirus.
A survey conducted by the agency showed Reuters Factory activity in China is likely to stabilize in September, adding to a series of indicators that the world’s second-largest economy is beginning to stabilize, which could further boost demand.
Data on Thursday showed that the US economy maintained a fairly strong pace of growth in the second quarter and activity appeared to accelerate in the quarter, indicating potentially healthy demand for fuel.
The backdrop of tight supplies in the US provided further support to oil prices, as storage in Cushing, Oklahoma, the delivery point for US crude futures, reached its lowest levels since July 2022.
US oil production is also expected to slow due to a decline in the number of drilling rigs, and the record global supply and demand decline of 103 million barrels per day could push the market into a deficit of more than 2 million barrels per day in the fourth quarter.
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2023-09-29 06:52:56
#Oil #prices #declining…and #Brent #crude #oil #Energy
