Oil prices under pressure due to demand concerns related to China – Commerzbank

Oil prices have been under pressure since the end of last week. Brent is now trading at just under $72 per barrel, WTI at around $68, Commerzbank’s commodity analyst Carsten Fritsch notes.

Chinese demand continues to weaken

“The recent price slide was triggered by disappointment over the lack of additional stimulus measures in China, which did little to alleviate demand concerns in the world’s second-largest oil consumer. These concerns were further fuelled by the report that Saudi Arabia will supply less crude oil to China in December than in previous months.”

“As reported by Reuters, citing trade sources, December deliveries are expected to be 36.5 million tons. In November, with one calendar day less, 37.5 million tons are expected, following 46 million tons in October. This confirms what was already indicated by the weak Chinese crude oil imports in October and the reduction of the official selling prices for December.”

“Chinese demand continues to weaken and no improvement is in sight for the fourth quarter. After nine months, Saudi Arabia’s oil exports to China were already almost 11% lower than in the same period last year.”