Despite a 2% rise on Friday, boosted by Iraq’s support for OPEC+ oil cuts, prices are seeing a loss of close to 4% for the week.
The oil markets are experiencing fluctuations today, marked by renewed concern about declining demand in the United States and China, along with ambiguous signals from the US Federal Reserve, creating uncertainty for investors.
Brent crude oil futures for January show a slight rise of 8 cents, reaching $81.49 a barrel. On the other hand, US crude oil futures West Texas Intermediate (WTI) for December gained 1 cent, standing at $77.26.
Despite a 2% rise on Friday, boosted by Iraq’s support for OPEC+ oil cuts, prices see a loss of close to 4% on the week, marking three consecutive weeks of decline, a trend unseen since May.
Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities, says investors’ attention is focused on slowing demand in the United States and China. Although concerns about possible supply disruptions due to the conflict between Israel and Hamas have eased, uncertainty remains in the markets.
Oil: the data to be expected
The Energy Information Administration (EIA) reports this week that crude oil production in the United States will increase less than expected this year, while demand will experience a drop. Distrust in a possible tightening of US monetary policy also affects market confidence, following the statements of Federal Reserve Chairman Jerome Powell on the possibility of raising interest rates if progress is not made in containing inflation.
Concern intensifies with weak economic data this week from China, the world’s top crude importer, raising fears of faltering demand. Refineries reduce their orders to Saudi Arabia, the main world exporter, for December. In October, consumer prices in China fall to lows not seen since the pandemic, raising concerns about the country’s economic recovery.
On the supply front, Saudi Arabia and Russia, the main oil exporters, confirm this week that they will maintain their additional voluntary cuts in crude production until the end of the year. This decision reflects persistent concerns about demand and economic growth that continue to weigh on oil markets. OPEC+ is scheduled to meet on November 26 to address these challenges.
Source: Ambito
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