Oil Prices Bite a Bit After a Record‑Breaking Soak
Yesterday’s oil‑price surge saw Brent and WTI hit fresh highs this year, only for the market to take a little breather. It’s like the market just finished a sprint and decided to stretch a bit before the next one.
Brent & WTI: A Quick Dip, A Big Win
- Brent slid to $93.80 per barrel around 3:30 pm GMT after peaking at $94.58 earlier that morning.
- WTI dipped to $90.30 this afternoon, following a high of $91.11 at dawn.
- Both grades are still eyeing a third straight week of gains – if the trend holds.
What’s Keeping the Gains Alive? China’s Economic Pulse
Positive Data Highlights:
- Industrial production surged 4.5% in August (year‑on‑year), the best since April last year.
- Retail sales jumped 4.6% in the same period – the strongest since May.
- Unemployment fell to 5.2% in August from 5.3% the month before.
- The Chinese government trimmed the cash reserve requirement, boosting bank liquidity for lending.
All of these signs gave investors a boost, especially after a string of weaker indicators that had worried markets.
European Central Bank, US Demand, and the Commerzbank Forecast
The ECB lifted rates by 25 basis points yesterday and hinted that the “peak” is now reached – hinting a pause in the tightening cycle.
Commerzbank, however, issued a caution: “Oil might face further pressure if US gasoline demand keeps slumping.”
US data from the Energy Information Administration showed:
- Oil, gasoline and distillate inventories rose more than expected this past week.
- These gains come after a sharp drop that rattled investors worried about supply limits.
OPEC’s Role and the Black Sea Balance
Saudi Arabia’s OPEC-led group is still slashing production by 1 million barrels per day until year’s end, supporting market prices. But supply side pressures have largely been met.
Now, the focus shifts to demand…
Key drivers of demand include:
- Positive economic data from China.
- Continued US growth, even amid higher interest rates.
- The risk of any escalation in the Black Sea that could disrupt Russian supplies, though nothing imminent so far.
Quick Takeaway
Oil’s performance today owes a lot to the tick-up in Chinese economic stats, supportive Beijing measures, and steady OPEC cuts. A slowdown or spike in U.S. gasoline demand could still swing prices. Keep a close eye on the Black Sea and U.S. inventory levels – they might be the next plot twist.
Want the latest in real time? Subscribe now!
