Oil prices drop due to uncertain demand outlook
- Web Desk
- Nov 13, 2023
WEB DESK: International oil prices witnessed a notable decline at the beginning of the week, grappling with an uncertain demand outlook influenced by diminishing demand in the world’s top oil consumers—the United States and China.
The impact of the decreasing oil prices on petrol prices in Pakistan remains uncertain, awaiting the government’s announcement of new petrol prices this week.
Brent crude is currently trading at $80.52 per barrel, experiencing a 1.1 per cent decrease for the day.
Simultaneously, West Texas Intermediate crude (WTI) is trading at $76.43 per barrel, down by 1.12 per cent on the day.
It’s noteworthy that both benchmarks plunged by over 4 per cent last week, marking their third consecutive weekly loss.
This trend is attributed to concerns about demand outweighing the supply disruptions caused by the Israel-Hamas conflict.
Both benchmarks are now below the 100-day moving average of $86.61 a barrel for WTI and $82.31 a barrel for Brent, as reported by Reuters.
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Despite gaining nearly 2 per cent last Friday following Iraq’s support for OPEC+ oil cuts, prices lost about 4 per cent for the week, registering their third weekly loss for the first time since May.
The US Energy Information Administration (EIA) reported that crude oil production in the United States this year is expected to rise slightly less than previously anticipated, while demand will decrease.
The projection for next year suggests that per capita US gasoline consumption could reach the lowest level in two decades.
Weak economic data from China, the world’s largest crude oil importer, further heightened concerns about diminishing demand.
China’s consumer prices fell to pandemic-era lows in October, casting doubt on the strength of the country’s economic recovery.
In addition, refiners in China requested less supply from Saudi Arabia, the world’s largest exporter, for December.
On the supply side, US energy firms reduced the number of oil rigs operating for the second consecutive week, reaching their lowest count since January 2022, as reported by energy services firm Baker Hughes.