Oil prices fall back amid demand uncertainty
2023-12-21
Summary:
Thursday's oil price drop, driven by rising US crude inventory, outweighed Middle East tensions' supply disruption impact, raising demand concerns.
Oil prices fell on Thursday, as concerns over weak demand following a surprise US crude inventory build outweighed supply disruptions that is caused by geopolitical tensions in the Middle East.
The EIA said that crude inventories rose by 2.9 million barrels in the week to 15 Dec, compared with analysts' expectations for a drop of 2.3 million barrels.
It added that US crude output rose to a record 13.3 million bpd last week. According to S&P Global Commodity Insights, the country is producing more oil than any country in history.
The US bought 2.1 million barrels of crude for delivery in February, bringing total purchases to about 11 million barrels. But the latest economic data painted a dire picture of the prospect of global energy consumption.
The German producer price index slides for fourth month in a row in Nov and business confidence unexpectedly dropped to a 3-month low in Dec. China’s marine fuel oil exports in November fell sharply to a ten-month low as refiners cut crude throughput amid lower crude runs.
Hamas leader visited Egypt on Wednesday for discussions with Egyptian officials who are seeking to mediate another truce but there remains a huge gulf between Hamas and Israel’s stated positions on the deal.
Brent crude is consolidating below the $80 level which acts as resistance. The path of least resistance is still up until it falls below the ascending trend line. The line in the sand for a selloff might be at the 200 SMA.
Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
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