Middle East Tensions Ease as Oil Demand Growth Slows, China’s Impact Falls

Petroleum Prices Key Points

• Crude oil futures traded higher on Wednesday morning after a sharp decline in the previous session.
• Brent oil futures (December): $74.47, up 0.30%
• WTI futures (November): $70.83, up 0.35%
• MCX crude oil futures (October): ₹5,953, up 0.51% from the previous close of ₹5,923
• MCX crude oil futures (November): ₹5,931, up 0.58% from the previous close of ₹5,897

Petroleum Demand and Supply

Impact of Israel-Iran conflict on oil supply

• Israel may avoid attacks on Iran’s nuclear and oil facilities
• It will ease concerns about immediate supply disruptions

Overall petroleum demand and supply outlook

• Oil demand growth is expected to slow to 900,000 barrels per day in 2024 and 1 million barrels per day in 2025, compared to 2 million barrels per day in 2022-23.
• China's contribution to demand growth, which was 70% in 2023, is projected to drop to 20% in the coming years.

Petroleum News: Major Highlights

• Libya’s National Oil Corporation restored production to 1.3 million barrels per day by October 13, following a political crisis.
• Surplus crude from Libya has flooded the European market, coinciding with maintenance shutdowns at European refineries.
• Sellers have been forced to cut prices due to oversupply:
• The premium of Azeri Light to Brent dropped to $1.55 per barrel, the lowest since April.
• Differentials for CPC Blend, Saharan, and Es Sider blends have also weakened, according to FGE analyst Sofia Pribludnaja.

Petroleum Market Key Takeaways

• Market volatility is being driven by tensions in the Middle East and China’s slowing demand.
• The International Energy Agency’s forecast of a potential surplus in 2024 adds further uncertainty.