Oil prices took a significant hit, dropping by 3% following China’s decrease in exports for the sixth consecutive month. Consequently, global demand has seen a decline, with China experiencing a fall of 6.4% in its October exports, while imports rose by 3%. This led to negative effects in the oil market, causing West Texas Intermediate and Brent crude futures to hover around $79 and $83 per barrel, respectively.
According to Dennis Kisler, who serves as the senior vice president at BOK Financial’s trading division, the market displays a heightened focus on demand destruction, as opposed to concern over increasing war tensions. Despite Moscow and Saudi Arabia implementing voluntary curbs, supply levels have not seen significant improvements, with Remarks from Kissler suggesting that Russian ship traffic has indicated export levels above what the Russian oil minister has been stating. With OPEC+ due to convene later this month to discuss extending the curbs into next year, the future of the oil market remains uncertain.
Furthermore, the US dollar index rose on Tuesday, further contributing to the pressure on crude prices, as oil is denominated in dollars. Given the current economic circumstances and a potential extension of the unilateral curbs, the persistent volatility in the oil market is likely to be the focus for the foreseeable future.
