Commodities Buzz: Oil Focuses On Tight Diesel Market Says OPEC

15 Nov 2022 , 01:07 PM

OPEC stated yesterday that after three consecutive months of sharp declines, crude oil futures prices bounced back in October from low levels recorded a month earlier. This took place amid easing selling pressure in futures and financial markets and a drop in US dollar value against a basket of major currencies to its lowest point since mid-September. Between 27 September and 26 October, the US dollar index fell by about 4%. Oil futures were also supported by an improving supply/demand outlook in the short term and a tight diesel/gasoil market, particularly in Europe and the US East Coast, which was exacerbated by refinery outages in several regions and a workers strike in French refineries for several weeks that reduced the supply of petroleum products. Investors turned their focus to the supply outlook in anticipation of an EU ban on seaborne crude oil imports from Russia for cargoes loading as of 5 December 2022. Supportive 3Q22 economic data from the US and China added support to oil futures. A higher financial flow in oil futures contracts, mainly ICE Brent, was reflected in higher open interest, likely contributing to supporting the oil market. Between the weeks of 27 September and 25 October, open interest related to ICE Brent rose by 11%. However, the oil price rally was limited as the market remained cautious about the rise of COVID-19 cases in China and the reinstatement of some mobility restrictions, which weighed on the demand outlook, although official data showed an uptick in China’s gross domestic product in 3Q22.Powered by Commodity Insights