The weakness of oil continues, with prices falling for Brent which travels below 96 dollars a barrel and the WTI which moves below the 90 dollars a barrel threshold. “The oil market has changed in the past few weeks. Sentiment was rather negative two weeks ago given continuing concerns over demand. A sentiment that seems to have only intensified, with Brent trading at a low of $ 92.78 a barrel last week, the lowest levels since February and the Russian invasion of Ukraine “, recall from ING, underlining that on the side of the offer, there are several factors to evaluate. One is Libya which appears to be showing a resumption of production after months of interruptions. Furthermore, there may also be a breakthrough in the Iranian nuclear talks.
And in fact, there is still a lot of uncertainty, with the stop of oil flows along the southern route of the Druzhba pipeline. This section supplies Slovakia, Hungary and the Czech Republic, with flows passing through Ukraine. The flows along the northern route of the pipeline, which supplies Poland and Germany, remain unchanged. The Czech pipeline operator expects flows along the southern route to resume in the coming days, which has supported the market somewhat. “Clearly there is uncertainty about this and the market is anxiously awaiting the confirmation of a restart of flows”, underline from ING who dwell on the demand side, with the growing risk of a recession that has weighed on the prospects for black gold .
“What is clear is that the oil market is still struggling with uncertainty in supply and demand and, as a result, is struggling to find convincing direction. This uncertainty, combined with the decline in volumes traded in the summer months, means that prices remain quite volatile ”, commented the Dutch bank’s commodity experts.