Bloomberg – On Friday, the price of WTI crude futures saw an upward movement, surpassing $70 per barrel. This increase appears to be driven mainly by technical factors. However, it’s important to note that despite this rise, the overall trend for the week indicates a loss of over 5%. This downward trend is mainly due to the combination of growing global supplies and a decrease in demand.
Earlier in the week, a release of data revealed a significant surge in US gasoline inventories, which saw an increase of 5.4 million barrels – the largest in nine weeks and far exceeding the expected 1 million barrels. This substantial rise points to a drop in demand for gasoline. Further dampening the market mood, data from the Bureau of Economic Analysis (BEA) showed that US crude oil exports reached nearly 6 million barrels a day in October, nearing a record high. There’s been a noticeable increase in these exports to Europe and Asia.
Adding to the market’s challenges, China, a major crude oil importer, is facing heightened economic uncertainties. This situation was compounded by Moody’s decision to downgrade China’s government credit rating outlook from stable to negative.
On another front, the OPEC+ countries announced additional cuts in oil production of 2.2 million barrels per day (bpd) last week. However, it’s worth noting that more than 1.3 million of these cuts are simply extensions of voluntary reductions previously made by Saudi Arabia and Russia.