The oil price, burdened by demand concerns, is set to rise – Commerzbank
|A slight improvement in business sentiment in China would probably lend support to oil prices. After all, weak demand in the world's second-largest oil consumer is one of the major disappointments this year, weighing on prices, Commerzbank’s commodity analyst Barbara Lambrecht notes.
Rapid advance of electric mobility curbs oil consumption in China
“The IEA currently expects Chinese daily oil demand to increase by only 100,000 barrels this year, compared with last year. At the beginning of the year, it had still assumed demand growth of 700,000 barrels. In addition to the weak economy, the rapid advance of electric mobility is also curbing oil consumption in China. Sales of electric cars are also rising sharply in the most important consumer country, the US, but their market share is so low that they are not yet significantly reducing oil consumption.”
“If the purchasing managers' index there also improves slightly, as analysts expect, this could also dampen demand concerns in the oil market. In addition, the first survey-based estimates of OPEC production in October will be published at the end of next week, which are likely to show a significant increase in Libyan oil production following the agreement between the parties to the conflict. The latest developments in production in Iraq are more uncertain.”
“Although the country has committed to offsetting overproduction in the first half of the year, this is not yet reflected in current production estimates. The lack of discipline among some OPEC+ members is putting particular strain on the patience of swing-producer Saudi Arabia. According to Bloomberg, the country's oil export revenues fell to their lowest level in more than three years in August. The high deviations of some from their production targets are a burden on prices.”
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