Oil futures: Crude edges higher, heads for slim weekly gains
Quantum Commodity Intelligence – Oil futures Friday were edging higher, with crude largely flat on the week after registering 9-month highs on Thursday before a spate of selling took over.
Oct23 ICE Brent futures were trading at $87.18/b (1700 GMT), compared to Thursday's settle of $86.40/b.
At the same time Sep23 NYMEX WTI was trading $83.63/b, versus Thursday's close of $83.16/b.
The key benchmarks closed last Friday at $86.24/b and $82.82/b, respectively.
"Crude oil gave back some of the recent gains as investors took profits. Technicals also played their part, with the market looking overbought," said ANZ commodity strategist Daniel Hynes.
However, solid fundamentals that briefly lifted Brent above $88/b remain in place, including a likely supply/demand deficit for the remainder of the year and simmering tensions in the Black Sea that could further curtail Russian supplies.
The knock-on effect of possible LNG shortfalls has also been felt in oil markets, with diesel cracks shooting up midweek after industrial action in Australia threatened up to 10% of the global LNG supply.
OPEC data showed on Thursday showed global oil demand could outpace supply by more than 2 million bpd in Q3 as production cuts from Saudi Arabia and Russia take hold.
OPEC forecast Q3 global oil demand at 101.96 million bpd in its monthly oil report, up 100,000 bpd from its July estimate, against non-OPEC supply of 72.39 million bpd.
That leaves a balance of 29.57 million bpd versus OPEC output pegged at 27.3 million bpd after coordinated cuts from Saudi Arabia and Russia from July through to September – leaving a supply deficit of 2.3 million bpd.
However, more negative data from Beijing this week took the shine off the commodities sector as China sank into deflationary territory for the first time since early 2020, while a lack of stimulus has also flagged warning signs.
"Increasing fears that for all the promises of further stimulus measures, Chinese authorities may be facing limitations in the type of stimulus they can implement when it comes to kick starting domestic demand," said Michael Hewson, chief market analyst at CMC.
