Oil prices lost further ground on Tuesday, still driven by progress in negotiations for a possible ceasefire in Gaza, as well as it is an unfavorable development the relationship between supply and demand. The price of a barrel of North Sea Brent for October delivery fell 0.59% to close at $77.20. The barrel of American West Texas Intermediate (WTI) with maturity in September fell by 0.44 per cent.to $74.04. For Matt Britzman, of Hargreaves Lansdown, the prospect of a possible ceasefire in the fighting in Gaza “subduing the fears that have so far supported prices”.
US Secretary of State Antony Blinken is to visit Qatar in the hope of convincing the belligerents to accept the new proposal presented by the US on Friday. to achieve a ceasefire. The Palestinian Islamist movement Hamas believed that this new plan was equivalent to “an American submission to the terrorist Netanyahu’s new relationship”referring to the Israeli Prime Minister. Hamas accuses the Americans of having integrated “new relationships” presented by Israel, in particular the maintenance of troops of the Jewish state on the border between Gaza and Egypt.
Fuel prices: it’s time to fill up
The increase in US production is worrying
In addition to the situation in the Middle East, for Andy Lipow of Lipow Oil Associates, the poor trajectory for black gold is due to fundamental factors, namely a negative perception of the balance between supply and demand. Organization of Petroleum Exporting Countries (OPEC) revised downlast week, its demand forecasts for 2024, particularly due to China’s lack of economic momentum.
Furthermore, according to the analyst, the market is concerned about an increase in the production of several major players, first and foremost the United States, which recorded a new record at the beginning of August, i.a. of 13.4 million barrels per day. Andy Lipow also points out that the end of the high road and air season is approaching in the US, which could further dampen demand.
The fact that margins have fallen significantly on refined products, especially diesel, is hampering refiners’ crude oil demand, which in turn is likely to weaken demand. In this context, the possible abandonment of the OPEC+ agreement by OPEC and its allies has gradually increased their volumes from October, to take account of the inertia in prices, “would show the market that they are ready to react to prevent any imbalance”says Andy Lipow.