Slowdowns in China and India eat away at Asian oil demand

15 August, 2018, 19:16 | Author: Natasha Holloway
  • Saudi Arabia reins in oil production as demand forecasts waver

Oil prices edged lower, with Brent crude was at 72.72 dollars a barrel and US crude was at 67.33 dollars.

West Texas Intermediate (WTI) crude for September delivery rose as much as 32 United States cents to US$67.95 a barrel on the New York Mercantile Exchange, and traded at US$67.60 at 2.50 pm in Singapore. Likewise, the oil for delivery in September contracts was trading higher by Rs 22, or 0.47 per cent to Rs 4,664 per barrel in 318 lots.

Oil prices dipped on Monday as trade tensions and troubled emerging markets dented the outlook for fuel demand, though US sanctions against Iran pointed towards tighter supply ahead.

Benchmark Brent crude oil LCOc1 was down $1.01 a barrel at $71.45 by 9:51 a.m. EDT (1351 GMT).

Moreover, Turkey's economic turmoil has raised concerns about a contagious crisis throughout emerging economies, which dented market expectations for the overall oil demand in the coming months.

Oil traders will stay focused on a plethora of bearish factors now weighing on the market in the week ahead, after United States (U.S.) crude prices suffered their sixth straight weekly loss last week - their worst losing streak since August 2015.

It also said that trade friction between the U.S. and China was unlikely to have much impact on global oil demand growth, unless the rifts spread beyond those two nations.

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Oil prices decreased on Monday as data showed that inventories at a major USA crude delivery hub rose last week.

"If 1 million bpd or more of Iranian exports go AWOL, the current fragile supply-demand balance will be upended, potentially sending oil prices above the May peak". He is reportedly also considering the sale of some of the U.S.'s emergency oil supplies to deflate crude prices, according to a report in Reuters.

"The direct impact on global demand for oil is negligible", Fritsch said.

Oil futures fell more than $1 a barrel on Wednesday, pressured by a weaker global economic growth outlook and a report of rising USA crude inventories even as Washington's sanctions on Iran looked likely to curb that country's crude supplies.

Saudi Arabia's 200,000 b/d July production drop to 10.29 million b/d as reported in OPEC's monthly report shows Saudi Arabia is "not doing what they said", said Gene McGillian, analyst with Tradition Energy.

Despite the cautious mood in oil markets, bullish sentiment found some support from expectations that USA sanctions against Tehran would restrict Iranian crude exports, tightening global supply. Iran's foreign minister said officials won't meet with the U.S.at the United Nations General Assembly in NY in September, with sanctions on the Middle Eastern nation's oil industry due to come into effect on November 5.

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