Brent crude and WTI benchmarks recorded some recovery after an initial collapse on Wednesday, December 6. Oil prices went up a bit on Thursday, December 7, after falling to their lowest in six months the day before.
However, investors are still worried about slow demand for oil and economic slowdowns in both the U.S. and China.
A Naijaonpoint review of both benchmarks revealed that the West Texas Intermediate (WTI) was trading at $69.73 around 7:51 AM, GMT+1, while Brent crude was trading at $74.68 per barrel at the same time.
Note that on December 6, a Naijaonpoint review of global crude oil prices as of 6:26 PM, GMT+1, revealed that Brent was trading at $74.35 per barrel and WTI was trading at $69.38 per barrel.
Also, experts observed that the decrease in prices of Brent crude (lowest since July 2023) and West Texas Intermediate (WTI) (lowest since June 2023) benchmarks occurred due to an imbalance between the amount of oil available and the amount buyers want.
According to Reuters, Tina Teng, a market analyst at CMC Markets, mentioned that oil markets might have been sold off too much, which means the bounce back might just be a short-term recovery.
The market got worried because even though oil reserves decreased, U.S. oil production is still close to its highest levels ever.
Also, concerns about China’s economy stopped oil prices from rising much. Chinese customs data showed that in November, the amount of crude oil they brought in dropped by 9% compared to a year ago.
This was because there were already a lot of oil supplies, weak signs of economic growth, and less demand from private oil refiners.
Even though China’s overall imports went down in November, the things they sold to other countries increased for the first time in six months.
This suggests that industries making things might be starting to benefit from more international trade happening again.
A December 6 Reuters survey noted that in November 2023, OPEC (Organization of the Petroleum Exporting Countries) experienced a decrease in its crude oil production, marking the first drop since July 2023.
This decline was primarily due to reduced shipments from Nigeria and Iraq, according to a monthly Reuters survey released on Wednesday.
The survey revealed that OPEC collectively produced about 27.81 million barrels per day (bpd) of crude oil last month. This represented a decrease of 90,000 bpd compared to production in October 2023.