What to Expect from The Oil Market in the Fourth Quarter?
Oil prices slightly declined on Wednesday due to worries about the U.S. Federal Reserve’s second interest rate hike. This is despite a solid OPEC oil demand growth projection. The possible rate hikes respond to an unexpected increase in consumer prices in August.
By 0633 GMT, Brent oil futures were down 17 cents, or 0.2%, to $93.00 per barrel. American West Texas Intermediate crude was down 11 cents or 0.1% at $87.20 a barrel. A hotter-than-anticipated U.S. inflation data released on Tuesday put pressure on prices and crushed hopes that the Fed might pause its rate-tightening program shortly. The Federal Reserve will meet next Tuesday and Wednesday with inflation still running well above the 2% target established by the US central bank.
Chinese Ongoing Pandemic and Global Energy Markets
The world’s top oil importer, China, is seeing reduced gasoline consumption due to strict COVID-19 regulations. According to Edward Moya, China’s zero-COVID policy remains in place. It will keep any comeback in the next weeks contained. The major unknown is the U.S., and if the outlook for demand diminishes, oil might continue the downward trend since the beginning of the summer.
The US government will publish inventory figures at 10:30 AM EDT. The OPEC cited indications that major economies were performing better than anticipated. Moreover, it reiterated its predictions for growth in global oil demand in 2022 and 2023, supporting oil prices.
According to OPEC’s monthly report, oil demand will rise by 3.1 million barrels per day (BPD) in 2022 and by 2.7 million BPD in 2023, maintaining its previous projections.
