Global crude oil fell dramatically on Tuesday, construction on days of losses amid stagnant recovery in US gas demand. U. S. , Saudi Arabia’s resolve to cut its oil sales contracts even as OPEC increases production and a close slowdown in China’s crude oil imports. .
“The evolution of oil costs today is a transparent sign that the market is now seriously involved in the long-term demand for oil,” said Paola Rodríguez-Masiu, analyst at consulting firm Rystad Energy. It’s no longer just “a downtrend” -Mind-blowing trading game that floats costs. “
Oil costs appeared to be frozen for several weeks, trading in a tight $ 2-3 range consistent with a barrel, yet a slight decline that started late last week accelerated. US benchmark West Texas Intermediate (WTI) crude oil fell 7% to around $ 37 a barrel in a time before mid-afternoon in the US, while European benchmark Brent it had fallen 5% to just over $ 40 a barrel.
After being decimated in March amid widespread restrictions and staying at home, gas consumption in the United States recovered until late June to about 90% of grades throughout the year. Since then, however, it has remained largely in place. Even the lowest Labor Day gasoline costs in 16 years – $2. 22 a gallon, according to the Energy Information Administration (EIA) – were not enough for Americans to return to the roads en masse enough to eliminate the surplus. As the summer driving season in the United States comes to an end, the resumption of demand for stagnant gasoline has raised fears that the new general of post-pandemic life may result in lower fuel intake than before.
For oil bullies, more bad news came this weekend (5-6 September), when publications on the oil trade, S
“This is the first time since June that the Saudis have set [the Asia PSO for a key oil content] in a reduction in the Oman/Dubai benchmark,” ING analysts Warren Patterson and Wenyu Yao wrote in a note. “Clearly, this suggests that the market is not adjusting as temporarily as many expected, with a source up and a call for obviously in decline. “
Aramco is one of many state oil corporations that sets the value of its crude oil relative to foreign benchmarks, in its case to the Dubai / Oman benchmark, which is calculated through oil pricing agencies, like S
Saudi Arabia’s resolve to ask for goose for its crude comes at a time when the organization of oil-producing countries known as OPEC, Russia’s top ally, is softening production cuts brought in for the first time after the Covid-19 pandemic, which resulted in a source of massive market surpluses. After jointly reducing production to 9. 7 million barrels according to day (b/d), or about 10% of global oil production from May, OPEC and Russia agreed on July 15 to begin reducing those discounts to 7. 7 million b/d in August.
“The economies of the total world are opening up, it is a prudent and slow process,” Saudi Arabia’s Oil Minister Prince Abdulaziz bin Salman said at the time.
Meanwhile, before this week reports began circulating that Chinese crude oil imports, while still solid, fell in August from the record number of barrels imported in June. Markets probably shuddered with the news not because China’s 11 million barrels coincide with the day of crude oil imports. in August they were meager, but because China’s economic engine was one of the few resilient drivers of oil demand in the world. Any sign of weakening his prodigious appetite for oil would have primary implications for oil demand in the coming months.
Import relief may also mean that imports of Chinese crude oil in recent months were largely because of stock accumulation, as its state oil corporations benefited from oil prices, which at one point fell to around $20 in line with the barrel.
I covered the energy industry, with a focus on fossil fuels. Previously, I covered oil markets in Africa, the Mediterranean and the Gulf of the Middle East for the publication of raw materials.
I covered the energy industry, with a focus on fossil fuels. Previously, I covered the oil markets in Africa, the Mediterranean and the Gulf of the Middle East for argus Media’s unso cooked fabric publication in London. I graduated from the London School of Economics with a master’s degree in 2017. Contact me at scott. carpenter. freelance@gmail. com.