As the markets stabilize, oil prices fall due to poor Chinese demand forecast

7 Nov 2023 , 09:56 AM

Due to worries about poor demand in China, oil prices dropped on Tuesday, giving up most of the previous day’s gains. Investors were concentrating on trade data that was scheduled for release later in the day to determine how much demand there was in the second-largest oil consumer in the world.

U.S. West Texas Intermediate crude was down 23 cents, or 0.3%, to $80.59 per barrel, while Brent crude futures lost 23 cents, or 0.3%, to $84.95 a barrel.

Following the reaffirmation by leading exporters Saudi Arabia and Russia of their commitment to additional voluntary oil production cutbacks until the end of the year, both benchmarks saw a gain of approximately 30 cents on Monday.

China’s import and export data for October will be made public on Tuesday at 0300 GMT. On Thursday, important consumer price inflation (CPI) and bank lending data are scheduled to be released.

In response to mounting international pressure, Israeli Prime Minister Benjamin Netanyahu said his country will take into account ‘tactical little pauses’ in the war in Gaza to allow aid to enter or hostages to escape. However, he once again rejected calls for a general ceasefire.

According to a statement from a ministry of energy source, Saudi Arabia stated on Sunday that it will carry out its further voluntary cut of one million barrels per day (bpd), which translates into production of roughly nine million bpd for December.

Additionally, Moscow declared that it will carry out an extra voluntary 300,000 barrel per day supply cut from its exports of petroleum products and crude oil through the end of December.

Regarding supply, when the United States lifted its sanctions against the nation, sources close to the discussions revealed that Venezuela’s state-owned PDVSA was in discussions with regional and international oilfield companies about hiring tools and services to help boost the country’s declining output.

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