The monthly average U.S.-dollar price of West Texas Intermediate (WTI) crude oil decreased by $3.59 (-4.0%) to $85.84/barrel in October. That retreat occurred within the context of a somewhat stronger U.S. dollar (broad trade-weighted index basis -- goods and services), the lagged impacts of August’s increase of 757,000 barrels per day (b/d) in the amount of petroleum products demanded/supplied (to 20.9 million b/d), and accumulated oil stocks that trended marginally upward -- but still well below the midpoint of the five-year average range (October 2023 average: 422 million barrels).
Selected highlights from the 31 October 2023 issue of OilPrice.com‘s Intelligence Report include:
“Oil
prices are once again under pressure due to uncertainty about China’s economy,
with the latest manufacturing data reigniting demand fears,” wrote editor Tom Kool.
“Bearish sentiment around China’s economy dropped away in recent months, but
October’s manufacturing activity data will undoubtedly bring back the issue of
weaker Chinese demand to the global crude agenda. Surprising virtually
everyone, China’s manufacturing PMI index dropped to 49.5 from 50.2 in
September, whilst non-manufacturing PMI indicated a slowdown in services
growth. With Brent trending around $88 per barrel, it seems it would take a
serious escalation in the Middle East to send oil prices spiking.”
BP Shares Drop After Lukewarm Q3 Result. Adversely
impacted by a $540 million write-down on offshore wind projects in New York as
well as weak natural gas results, BP reported third-quarter earnings of $3.3
billion, missing analysts’ $4 billion forecast and prompting a 5% share drop on
Tuesday.
Venezuelan Refining Collapses. Just as Venezuela prepares to ramp up crude exports amidst a 6-month
sanctions clearance, the country’s 955,000 b/d Paraguana refining complex saw
the closure of two CDUs due to fires and lack of feedstock, lowering its utilization
rate to as little as 10%.
Investors Start Shorting Crude Futures. Hedge funds and other money managers sold the equivalent of 14 million barrels in the six most important oil futures and options contracts in the week ending October 24, marking the fourth time in five weeks that funds were net sellers.
The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.
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