Oil futures: Crude at multi-week lows amid demand growth concerns
Quantum Commodity Intelligence – Crude oil futures Tuesday were sliding lower, with benchmarks tumbling to monthly lows as macroeconomics continued to overshadow geopolitical events.
Front-month Sep24 ICE Brent futures were trading at $81.41/b (1950 GMT), compared to Monday's settle of $82.40/b, posting the lowest levels since the price slump in the wake of the early-June OPEC+ meeting. However, prices edged up in late trading from the intraday low of $80.51/b.
At the same time Sep2424 NYMEX WTI was trading at $77.36/b, versus Monday's settle of $78.40/b. Aug24 expired at $79.78/b.
Faltering demand growth continued to add to summer woes with Chinese refiners running lower throughputs, although this has in part been offset by state inventory building.
"The lack of concrete stimulus measures from China at the key Communist Party conference has added to the downbeat mood, pointing to a bumpy road ahead for policy implementation. This comes as the Chinese economy grew at a slower-than-expected pace in Q2," commented City Index analyst Fiona Cincotta, referencing last week's gathering of top CCP party officials.
Meanwhile, Morgan Stanley expects Brent to average $86/b in the third quarter but will drop into the $70s/b during 2025 as markets return to oversupply.
The US investment bank expects OPEC and non-OPEC supply to grow around 2.5 million bpd next year, outpacing demand growth. OPEC+ is scheduled to start unwinding cuts from October.
President Biden's decision not to run for reelection was seen as having little impact on immediate oil prices, but analysts said the move makes it more likely that former President Donald Trump will be returned to the White House, likely creating a more friendly environment for the drilling industry.
Spot prices in the North Sea were also easing in the early part of the week as flagship Forties traded in Monday's MOC window at +$1.40/b to the underlying Dated Brent swap on a CIF Rotterdam basis, the equivalent of around $0.50/b FOB.
Forties had traded as high as +$2/b on a CIF basis last week.
