Brent oil fell more than 10% last week – Commerzbank

The price of Brent oil has fallen more than 10% in the past week and a half and is now trading at around $73 a barrel, close to its lowest level in the last 9 months. While the headlines of the past few days have been dominated by developments on the supply side, fundamental demand concerns have created something of an “imbalance”: reports of production disruptions have barely sent oil prices higher, while the prospect of a possible increase. supply has put prices under severe pressure, notes Barbara Lambrecht, commodities strategist at Commerzbank.

How much is oil demand really falling?

“The main demand concern is China, where demand has been particularly disappointing in recent months. China’s crude oil imports, which will be released next Tuesday as part of foreign trade data, could therefore attract particular attention. A positive surprise would likely lead to a rebound in oil prices. Next week, the three energy agencies will also publish their new monthly outlooks.”

“The US Energy Information Administration’s outlook for the US market is likely to draw particular attention next Tuesday. Last month, the agency was more optimistic about U.S. demand for the current year and slightly more pessimistic for the coming year, but also forecast demand growth of 1 percent for 2025. If those forecasts hold true, this this should support sentiment, especially as the outlook for US oil production is likely downgraded amid significantly lower prices.”

“However, the latest hard numbers for July were quite disappointing. After the IEA barely adjusted its forecasts last month, China’s demand may now be revised downwards. However, the same is true here: as OPEC+ has now delayed its production increase for at least another two months, and Iraq and Kazakhstan have also been forced to cut production, the IEA could report a balanced oil market for the fourth quarter. It is also likely to support the price level as it will prevent a rise in OECD oil stocks.”