By Adedapo Adesanya
The price of Brent crude oil grade slid below $80 per barrel on Wednesday, as it went down by $2.07 or 2.5 per cent to $79.54, its lowest level in more than three months on concerns over waning demand in the US and China.
Also, the US West Texas Intermediate (WTI) crude oil grade fell by $2.04 or 2.6 per cent to $75.33 per barrel, also its lowest price since mid-July.
According to analysts, the market is clearly less concerned about the potential for Middle Eastern supply disruptions and is instead focused on an easing in the balance.
Data from China, the world’s biggest crude oil importer, showed its total exports of goods and services contracted faster than expected, feeding worries about the energy demand outlook.
Exports in the world’s largest oil importer shrank 6.4 per cent from a year earlier in October, customs data showed on Tuesday, faster than a 6.2 per cent decline in September.
In the euro zone, data showing falling retail sales also highlighted weak consumer demand and the prospect of recession.
Also weighing on prices, U.S. crude oil stocks rose by almost 12 million barrels last week, market sources said late on Tuesday, citing American Petroleum Institute (API) figures.
If confirmed, that would be the biggest build since February. However, the US Energy Information Administration (EIA) has delayed the release of weekly oil inventory data, usually on Wednesdays, until November 15 to complete a systems upgrade.
US crude production will rise this year by slightly less than expected but petroleum consumption will fall by 300,000 barrels per day, the EIA said on Tuesday, reversing its previous forecast of a 100,000-barrels per day increase.
Russia, a part of the producer groups known as the Organisation of the Petroleum Exporting Countries and its allies, OPEC+, is considering lifting an export ban on some grades of gasoline.
The country introduced a ban on fuel exports on September 21 to tackle high domestic prices and shortages. The government eased restrictions on October 6, allowing diesel exports by pipeline, but kept measures on petrol exports.
Barclays on Wednesday lowered its 2024 Brent crude price forecast by $4 to $93 a barrel, citing resilient US oil supply and higher output from Venezuela following the relaxation of sanctions on the Latin American producer.
The lifting of sanctions on Venezuela’s oil sector in October added supplies to a market strained by OPEC+ production cuts.
Modupe Gbadeyanka