The price of Brent crude oil fell yesterday to its lowest level since mid-June, says Carsten Fritsch, commodity strategist at Commerzbank.
Demand concerns push price lower
“The Brent oil price fell to its lowest level since mid-June yesterday, but had already fallen by around 3% on Friday, with most of the price decline occurring in the late afternoon and evening. There is no specific oil market trigger for the current price weakness. Therefore, the headwind is most likely coming from the generally negative market sentiment towards cyclical commodities.”
“Oil prices were initially able to withstand this, but this changed abruptly on Friday. Demand concerns have evidently gained the upper hand as a result. Voluntary production cuts by OPEC+ are ensuring that the oil market is undersupplied in the current quarter. This is also shown in the forward curve.”
“The significant decline in US crude oil inventories over the past three weeks also suggests that supply is rather tight. Supply risks do not seem to be playing a role in the market at the moment. Given the current dominance of demand concerns, oil prices may initially struggle to regain lost ground. However, we expect oil prices to rise again in the coming weeks due to the factors mentioned above.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
