Since the beginning of October, the price of a barrel of Brent crude oil has mainly fluctuated between US$60 and US$65. This is unlikely to change in the coming week, as the factors supporting and influencing prices are likely to balance each other. Commerzbank commodity analyst Barbara Lambrecht says at the beginning of the week, there was particular interest in China’s crude oil imports.
China’s oil imports remain strong amid high diesel crack spread
“According to the IEA, Chinese oil demand this year is likely to be only 100,000 barrels per day higher than last year, but crude oil imports in the first ten months were 400,000 barrels per day higher than the same period last year. We expect imports to remain high in November. Part of this is likely to be the continuation of the build-up of strategic reserves. Recently, the much-cracked diesel market has provided a strong incentive for crude oil processing. “So we believe imports were also very strong in November and that will support prices.”
“On the other hand, new forecasts from energy agencies during the coming week are likely to weigh on prices. Although no major correction is expected, they continue to point to more supply on the oil market in the coming year. Last month, the EIA revised its oil price expectations slightly upward. This was mainly due to tighter sanctions against Russia and higher storage in China. Higher prices and a recent surprise increase in production were decisive factors in slightly raising the forecast for US production. (See figure.) It is doubtful what will happen next.
