Oil Prices Retreat on Concerns Over U.S. and China Demand, EIA Production Outlook

13 Nov 2023 , 09:47 AM

Oil prices retreated on Monday, reversing gains from Friday, as renewed worries about diminished demand in the United States and China impacted market sentiment.

• Brent crude futures for January fell by 35 cents, or 0.4%, to $81.08 a barrel at 0051 GMT. Meanwhile, U.S. West Texas Intermediate (WTI) crude futures for December were at $76.82, down 35 cents, or 0.5%.
• Despite both benchmarks seeing nearly a 2% increase last Friday due to Iraq’s support for OPEC+ oil cuts, they incurred losses of about 4% for the week, marking their third weekly declines since May.
• The U.S. Energy Information Administration (EIA) reported that crude oil production in the United States for this year would increase slightly less than previously anticipated, coupled with a decrease in demand.
• Weak economic data from China, the world’s largest crude oil importer, heightened concerns about faltering demand. Refiners in China also requested reduced supply from Saudi Arabia, the world’s largest exporter, for December.
• Leading oil exporters Saudi Arabia and Russia affirmed last week that they would maintain their additional voluntary oil output cuts until the end of the year due to ongoing concerns about demand and economic growth.
• OPEC+, comprising the Organization of the Petroleum Exporting Countries and allies including Russia, is scheduled to meet on Nov. 26.
• On the supply side, U.S. energy firms reduced the number of oil rigs in operation for the second consecutive week, reaching their lowest level since January 2022, according to energy services firm Baker Hughes. The rig count serves as an indicator of future output.