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

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 last close of ₹5,897

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

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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.

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