Oil held a modest decline on signs that supply is rebounding while concerns linger about demand in China, the biggest importer.
(Bloomberg) — Oil held a modest decline on signs that supply is rebounding while concerns linger about demand in China, the biggest importer.
West Texas Intermediate futures for October traded near $80 a barrel, after falling 0.7% on Monday. Observed exports from Iran have surged to 2.2 million barrels a day this month, and there has been a sudden flurry of talks between Turkey and Iraq as those countries seek to restart a major oil pipeline.
A rally in crude that started in late June has faltered over the last couple of weeks, with futures back to where they were at the start of the year. Efforts by OPEC+ linchpins Saudi Arabia and Russia to curb production have tightened the market. However, the demand outlook in China is clouded, and there are signs US interest rates will need to stay higher for longer to rein in inflation.
“Call it recession fears, economic headwinds or demand worries, they have been successfully countered by the OPEC+ group supply management strategy,” said Tamas Varga, an analyst at brokerage PVM. “Whilst the oil balance could obviously deteriorate, currently there is no reason to believe that global oil consumption would approach, let alone fall below supply.”
To get Bloomberg’s Energy Daily newsletter direct into your inbox, click here.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.