• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 6 mins GREEN NEW DEAL = BLIZZARD OF LIES
  • 21 hours e-cars not selling
  • 3 days CHINA Economy Disaster - Employee Shortages, Retirement Age, Birth Rate & Ageing Population
  • 39 mins The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.
  • 4 days If hydrogen is the answer, you're asking the wrong question
  • 4 days How Far Have We Really Gotten With Alternative Energy
  • 5 days Natural gas mobility for heavy duty trucks
City A.M

City A.M

CityAM.com is the online presence of City A.M., London's first free daily business newspaper. Both platforms cover financial and business news as well as sport and…

More Info

Premium Content

Oil Prices Slip As Summer Travel Season Draws To An End

  • After seven straight sessions of gains, Brent Crude fell below $90 and WTI Crude slipped to $86.86 due to diminishing jet fuel demand and China's economic uncertainties.
  • Russia and Saudi Arabia's extended supply cuts, alongside OPEC's sustained output reductions, had previously propped up oil prices.
  • Analyst Bjarne Schieldrop suggests prices could rally to $100-110 per barrel by year-end if global inventories decline as predicted, but China's economic data may deter further rallies.

Oil prices have dipped this morning as expectations of jet fuel demand ease as the summer travel period comes to an end, alongside continued concerns over China’s uncertain economic outlook.

Brent Crude is down 0.7 percent – dipping back below the $90 threshold at $89.97 per barrel – while WTI Crude has slipped 0.77 percent to $86.86 per barrel in early trading.

This follows seven consecutive sessions of gains across both benchmarks, with prices propped up by extended cuts from leading oil producers Russia and Saudi Arabia amid sustained output reductions from OPEC, the world’s most influential oil cartel.

The two countries have extended voluntary supply cuts to the year-end, on top of the April cuts agreed by several OPEC and its extended alliance (OPEC+) running to the end of 2024 – representing an over five percent reductions in global supplies.

This comes amid declining travel and aviation demand as the summer holiday season comes to an end across Western markets.

Bjarne Schieldrop, chief commodity analyst at SEB, said he believed that market sentiment was still highly influenced by Russia and Saudi Arabia’s policy decisions, which investors were struggling to read.

“The market is bewildered and cannot quite figure out whether the latest extension of Saudi Arabia’s unilateral cut to the end of the year is 1) A reflection of weakness to come and an effort to pre-emptively avoid the oil price from falling below $85 per barrel amid coming weakness, or 2) An effort to drive the oil price to $100-110 per barrel by the end of the year,” he said.

Forecasting future price movements, he added: “If the IEA’s latest calculations for global demand in the third quarter and fourth quarter are correct and Saudi sticks to its cuts then global inventories will indeed decline by 250m barrels by year end and Brent crude will rally to $100-110 per barrel.”

However, mixed market data from China is weighing down the prospect of further rallies, with exports dropping 8.8 per cent in August year-on-year, although crude imports have climbed 30.9 per cent.

Craig Erlam described oil prices as “steady”, following a sustained period of gains which had seen Brent Crude peak at seven month highs last week.

“The Chinese data this morning may have stood in the way of further gains so far today but it will be interesting to see whether it can add to recent gains after rising to 2023 highs in recent weeks,” he said.

Official inventory data from the US Energy Information Administration due out later today could reverse this morning’s slide, with the potential for further reductions in the country’s inventories.

ADVERTISEMENT

By Nicholas Earl via CityAM

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment
  • Mike Lewicki on September 07 2023 said:
    China August numbers 3rd best ever for oil imports

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News