Demand Fears Again Have Upper Hand In Driving Prices

Supply issues had been driving a recent moderate rally in oil prices but today global demand concerns took over again, as negative sentiment surrounding China and Hong Kong drove markets generally. The release of Chinese data due last week also painted a mixed picture of the Chinese economy and its woes in the property sector remained a concern.

• WTI reached an intraday high of almost $86/bbl before global growth fears took over and is now trading around $84.60/bbl down 0.5%. Brent rose to $94.27 but is now trading just around $93 and is also down 0.5%. Near-term Brent contracts continue to be priced higher than ones further out, which is bullish but consistent with slower growth expectations for 2023.
• The tight supply environment and global demand worries should to continue to drive oil price developments for the foreseeable future. The market is likely to watch if the US takes further measures to increase supply and how compliant OPEC+ is with the production cuts due to take place next month.