EBC Markets Briefing | Crude slips on increasing oversupply jitters
Oil prices edged lower on Friday after a slump in the last session over concerns that supply disruption risks from military conflicts across Europe and the Middle East could not negate a broad oversupply.
The IEA said in its monthly report that world oil supply would rise more rapidly than expected this year due to planned output increases by the OPEC+, while the OPEC report stuck to a more positive view.
Saudi Arabia's crude oil exports to China are set to surge, sources told Reuters on Thursday, with Aramco shipping about 1.65 million bpd that way in October, up sharply from 1.43 million bpd allocated in September.
US consumer prices in August increased by the most in seven months, and a surge in first-time applications for unemployment aid last week kept expectations high that the Fed will cut interest rates next week.
A surprising increase in US crude oil inventories, significantly exceeding market forecasts. The level of inventories plays a crucial role in influencing the price of petroleum products, which can, in turn, impact inflation.
The global oil glut is already underway, with inventories expected to swell in the current quarter, according to a US government report. The agency previously projected stockpile buildups of that size starting in Q4.
A double bottom pattern has been formed after Brent crude hit $65.56, indicating that a rally towards $66.30 is on the cards in the short term.
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