Tuesday saw an ease in oil prices, giving up most of the gains made on Monday, as concerns about winter demand and conflicting economic data from China, the world’s second-largest oil consumer, countered the effects of Saudi Arabia and Russia’s extended supply cutbacks. By 04:31 GMT, U.S. West Texas Intermediate crude was down 37 cents, …
Tuesday saw an ease in oil prices, giving up most of the gains made on Monday, as concerns about winter demand and conflicting economic data from China, the world’s second-largest oil consumer, countered the effects of Saudi Arabia and Russia’s extended supply cutbacks. By 04:31 GMT, U.S. West Texas Intermediate crude was down 37 cents, or 0.46%, to $80.45 per barrel, while Brent crude futures had dropped 47 cents, or 0.55%, to $84.71 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. Even while China’s imports of crude oil increased significantly in October compared to the previous year and month, the nation’s overall exports decreased more quickly than anticipated. He said, “The fourth quarter saw downward pressure on the global economy, which is reflected in the weak export trend.” Refiners in China are expected to reduce their crude output between November and December, which might restrict oil consumption and worsen price drops. Additionally, according to some analysts, the continuation of these output cuts indicates that markets are still wary about demand drivers, which might further pressure prices. Prices were also affected by worries that an earlier-than-anticipated pleasant winter may reduce demand for fuel and energy.
Regarding supply, markets are anticipating how long Saudi Arabia and Russia will be willing to limit their output. 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.
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