Noor Trends News, Technical Analysis, Educational Tools and Recommendations
Oil prices rose slightly in Asian trading on Monday, following a sharp decline last week driven by worries over slowing demand in China, the world’s largest oil importer, and easing concerns about supply disruptions in the Middle East.
Brent crude futures gained 0.37%, or 27 cents, to trade at $73.33 a barrel by 06:25 GMT, while U.S. West Texas Intermediate (WTI) crude futures climbed 0.45%, or 31 cents, to $69.53 a barrel.
Despite the gains, both benchmarks remained far below last week’s levels, when Brent dropped more than 7% and WTI shed around 8%. These marked the steepest weekly losses since early September, fueled by China’s economic slowdown and reduced geopolitical risk premiums.
Mixed Signals from China’s Oil Demand
While market sentiment remains cautious, Saudi Aramco’s CEO expressed optimism about China’s oil demand during an energy conference in Singapore. He pointed to increased policy support aimed at boosting economic growth, rising demand for jet fuel, and liquid-to-chemicals as reasons for his continued confidence.
China’s government, in line with expectations, cut its benchmark lending rates on Monday, as part of a broader stimulus effort to revitalize its economy. However, data released on Friday revealed that China’s economy grew at its slowest rate in the third quarter since early 2023, heightening concerns about a potential slowdown in oil consumption.
Middle East Tensions and Supply Outlook
Geopolitical developments in the Middle East continued to influence oil prices. U.S. President Joe Biden suggested on Friday that there might be a chance to manage tensions between Israel and Iran, which could help ease concerns of escalating conflict. However, the situation intensified over the weekend, with Israel signaling plans to target Hezbollah-related sites in Beirut.
On the supply side, U.S. energy firms have been scaling back oil and gas production. According to a report from Baker Hughes, the number of operating rigs fell for the fourth time in five weeks, with the total rig count down by one to 585.
The combination of China’s economic uncertainty and ongoing tensions in the Middle East will likely keep oil prices volatile in the coming weeks, as traders balance concerns over global demand with potential supply disruptions.
