A report from LONDON (Reuters) has stated that oil steadied today which was supported by OPEC+ cuts and uncertainty over what may happen next in the Middle East conflict. Another aiding factor was a favourable outlook into next year for an ample supply which also added to the downward pressure.
A weaker demand outlook also helped to push crude down more than 4% bringing it close to a two week low. The lower demand outlook was mainly due to media reports on Isreal which stated that it would not strike Iranian nuclear facilities and oil sites this helped to ease fears of any possible supply disruptions.
Brent crude oil futures rose 16 cents, or 0.2%, to $74.41 a barrel by 0930 GMT. U.S. West Texas Intermediate crude futures slipped 19 cents, or 0.3%, to $70.39.
Concern however still persists in the middle east about possible escalation of the conflict between Israel and Iran-backed militant group Hezbollah and OPEC+ supply curbs remain in place until December when some members are scheduled to start unwinding one layer of cuts.
Norbert Ruecker of Julius Baer said, "We would be somewhat surprised if the geopolitical risk premium has disappeared for the time being,"
"We see the market heading towards a supply surplus by 2025," he added.
The Organization of the Petroleum Exporting Countries and the International Energy Agency this week cut their 2024 global oil demand growth forecasts with China accounting for the bulk of the downgrades.
Oil prices have not been given much support from China despite it attempting economic stimulus. Over the next three years China will try to stimulate it’s own ailing economy with the issue of an additional 6 trillion yuan ($850 billion) from special treasury bonds. This report cam from local media sources.
"Monetary and fiscal efforts to revive the Chinese economy are proving a damp squib," said Tamas Varga at oil broker PVM.
The American Petroleum Institute's latest U.S. oil inventory data is coming up and the report is due later today followed by the government's figures on Thursday. Both reports are published a day later than normal following a federal holiday.
Analysts polled by Reuters expected crude stockpiles rose by about 1.8 million barrels in the week to 11th October.
Source: Investing.com
