Range Trading As Supply And Demand Forces Offset Each Other

Prices range traded again today as the market continued to be driven by the offsetting forces of tight supply conditions and fears regarding the impact of a global slowdown on oil demand.

• WTI is down about 0.7% from its intraday high and is trading just about $91.50/bbl. It continues to hold above its 10-, 20- and 50-day moving averages. Brent is 0.6% off its high and is now just under $97.70/bbl.
• The market is still working out what the likely impact of the OPEC+ output cuts this month and the upcoming EU sanctions on Russian oil will be in reality. Given the tightness of the market, the latter may be enough to push prices back above $100/bbl. (Bloomberg)
• Given supply concerns, there is likely to be some focus on the US API data out tonight, which last week reported a 6.53mn draw on crude stocks.
• The China National Petroleum Corp. said that the country’s crude demand fell 2.8% y/y in the year to September which has resulted in an inventory build of gasoline and diesel. (Bloomberg) Even a cautious reopening would put further pressure on global oil supplies pushing up prices.