Oil Falls as Israel Refutes Plan to Attack Iran Energy Facility
Oil prices declined below $75 per barrel after Israel told the United States it has no plan to launch a counter attack on Iranian oil or the country’s nuclear facilities.
Brent extended its decline for a third straight session with prices falling sharply by almost 4% in the early trading session on Tuesday the risk premium has diminished, said ING in a note.
According to data from crude oil daily price movement, ICE Brent crude is down 4% at $74.36 a barrel, while the US benchmark West Texas Instrument (WTI) falls 4.1% to $70.81 a barrel.
Israel has assured the US that it will not strike crude oil or nuclear facilities in Iran, removing a big overhang for the oil market in the immediate term, ING commodities strategists said in a note.
The slide in prices has also been fueled by concerns about a weaker demand outlook after China failed to provide details of a stimulus package to revive its economy and OPEC further trimmed its oil-demand outlook.
Analysts noted that Chinese trade data yesterday has not helped sentiment either. China’s crude oil imports dropped 7.4% month-on-month (-0.6% year-on-year) to 11.1 million b/d as refineries have struggled with weak margins.
This leaves cumulative imports down 2.8% year on year this year, according to ING note. Meanwhile, data from Mysteel OilChem shows that weekly refining margins for state plants in China fell 44% to CNY396/t at the end of September.
OPEC released its latest monthly oil market report yesterday where it lowered its demand growth forecast again for this year and 2025, primarily on expectations of softening demand from China.
The group cut its oil demand growth forecast by 106,000 b/d to 1.9 million b/d for 2024, and by 102,000 b/d to 1.6 million b/d for 2025. On the supply side, the group left non-OPEC+ supply growth estimates unchanged at 1.2 million b/d for 2024 and 1.1 million b/d for 2025.
The report also showed that OPEC production decreased by 604,000 b/d month-on-month to 26.04 million b/d in September. The decline was largely driven by Libya and Iraq, where output fell by 410,000 b/d and 155k b/d, respectively.
Production was 170,000 b/d higher than the agreed quota, with members like Iraq, Gabon, UAE and Kuwait still exceeding their obligations. Overall, OPEC+ production decreased by 170,000 b/d to 35.5m b/d in September.
Nigeria’s average crude oil production in September declined by as much as 33,000 barrels to 1.405 million barrels per day. In its October oil market report, the Organisation of Petroleum Exporting Countries (OPEC) revealed that Nigeria’s crude oil production fell from 1.438 million barrels per day in August, according to secondary data from Nigerian authorities.
Direct communication shows that Nigeria’s average crude oil production for September was 1.324 million barrels per day, a drop of 27 thousand barrels compared to 1.352 million barrels per day in the previous month.
Despite this decline, Nigeria remained Africa’s largest oil producer, widening the gap with Libya, which experienced production setbacks due to the shutdown of key oil fields, reducing its output to 450 thousand barrels per day.
Nigeria, meanwhile, has been struggling to increase oil production to meet both its OPEC quota and local refinery demands. Since the beginning of the year, the country’s output has hovered between 1.2 and 1.3 million barrels per day. #Oil Falls as Israel Refutes Plan to Attack Iran Energy Facility
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