Oil prices started the day with a loss in Asian trading today as concerns about oversupply and weak demand continued to weigh on prices.
Traders are also waiting for the outcome of a Fed meeting today and the Energy Information Administration’s latest weekly oil inventory report. Reuters noted in a report that recent economic data had reinforced expectations that the Fed would not start cutting rates in early 2024, which was translated as a bearish factor for oil since higher interest rates discourage increased consumption.
Also, in more bearish news, Russian oil exports hit the highest since July, according to ANZ analysts cited by Reuters, which deepened doubts about how much of the recently agreed additional OPEC+ output cuts would be implemented come January.
News that U.S. oil production is rising did not help matters, either, adding fuel to oversupply concerns that have flipped the futures market into a contango until the middle of 2024, according to Bloomberg.
“A US-led bump in non-OPEC supply and doubts over OPEC compliance colliding with some prospects of demand softening,” is how Mizuho Bank’s Asia head of economics and strategy, Vishnu Varathan described the situation to Bloomberg.
Oil prices have shed about 25% since September despite OPEC+ efforts to put a floor under benchmarks. WTI is trading below $70 per barrel while Brent crude has slipped below $75 per barrel.
On December 13, bitumen prices in Singapore and South Korea reached 460 and 380 USD, respectively. Singapore’s HSFO and Iran’s bulk bitumen settled at 429 and 281 USD.
Prepared by Rumays specialists group.