Oil heads for seventh week of losses on excess supply and weak ‎Chinese demand

Oil prices are heading towards a decline for the seventh week in a row due to concerns about global excess supply and weak Chinese demand, although prices recovered on Friday after Saudi Arabia and Russia called on more OPEC+ members to join the production reduction agreement.

According to Reuters, by 0359 GMT, Brent crude futures rose $1.29, or 1.7%, to $75.34 per barrel, and West Texas Intermediate crude futures rose $1.11, or 1.6%, to $70.45 per barrel.

Both benchmarks fell to their lowest levels since late June in the last session, an indication that many traders believe the market is experiencing an oversupply.

“The decline in oil prices forced OPEC+ to improve solidarity to calm the market,” analysts from Haitong Futures said in a note.

On Thursday, Saudi Arabia and Russia, the two largest oil exporting countries in the world, called on all OPEC+ members to join the agreement to reduce production, saying that this was in the interest of the global economy, just days after a difficult meeting of the alliance.

The Organization of the Petroleum Exporting Countries and its allies, known as the OPEC+ group, agreed to production cuts totaling 2.2 million barrels per day in the first quarter of next year.

Victor Katona, chief crude oil analyst at Kpler, said: “Despite the pledges of OPEC+ members, we see total production from OPEC+ countries declining by only 350,000 barrels per day from December 2023 to January 2024 (from 38.23 million barrels per day to 37.92 million barrels per day). million barrels per day).

Brent and West Texas Intermediate crude futures are trending down 4.5% and 4.8% during the week, respectively, their biggest losses in five weeks.

Concerns about the Chinese economy and the rise in US oil production also contributed to the market’s decline this week

Chinese customs data showed that China’s imports of crude oil in November fell by nine percent compared to last year, as high inventory levels, weak economic indicators, and slowing demand from independent refineries weakened demand.

In India, fuel consumption decreased in November after touching the highest level in four months the previous month, affected by the decline in travel traffic in the third largest oil consumer in the world.

Data from the US Energy Information Administration showed on Wednesday that production in the United States remained near record high levels of more than 13 million barrels per day.

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