• 5 minutes Covid-19 logarithmic growth
  • 8 minutes Why Trump Is Right to Re-Open the Economy
  • 12 minutes Charts of COVID-19 Fatality Rate by Age and Sex
  • 14 minutes China Takes Axe To Alternative Energy Funding, Slashing Subsidies For Solar And Wind
  • 16 mins Which producers will shut in first?
  • 2 hours The Most Annoying Person You Have Encountered During Lockdown
  • 5 hours Its going to be an oil bloodbath
  • 18 hours We are witnesses to the end of the petroleum age
  • 43 mins Saudi Aramco struggling to raise money for this year's dividend of $75 billion. Now trying to sell their pipelines for $10 billion.
  • 5 mins Russia's Rosneft Oil Company announces termination of its activity in Venezuela
  • 23 hours Breaking News - Strategic Strikes on Chinese Troll Farms
  • 13 mins Saudi Arabia Can't Endure $30 Oil For Long
  • 1 hour How to Create a Pandemic
  • 7 hours Wastewater Infrastructure Needs
  • 21 hours A New Solar-Panel Plant Could Have Capacity to Meet Half of Global Demand
  • 22 hours >>The falling of the Persian Gulf oil empires is near <<
Jim Hyerczyk

Jim Hyerczyk

Fundamental and technical analyst with 30 years experience.

More Info

Demand Pitfalls, High Supply Threaten Long-Term Trend

Rig

Despite rebounding on Thursday and early Friday, October West Texas Intermediate crude oil futures are heading for a third consecutive weekly decline and its sixth weekly lower close out of seven amid increasing concerns about slowing global economic growth that could hit demand for petroleum products.

Additional bearish factors include data released earlier this week showing a large build in U.S. inventories. The crisis in Turkey also contributed to the weakness by driving up demand for the U.S. Dollar. This lead to a broad sell-off in dollar-denominated commodities including crude oil.

Traders are also concerned about the impact of the U.S. tariffs on China. Asian demand is showing signs of slowing down as trade disputes and a stronger dollar drag the economies of some of the world’s largest oil buyers.

The news that the U.S. and China will renew trade talks in late August may provide enough optimism to fuel a short-covering rally back into resistance, but without a permanent solution to the trade dispute, this rally is likely to be met with fresh selling pressure.

At this time, the fundamentals are bearish so it’s probably going to take a supply disruption to drive prices sharply higher.

U.S. Inventories Report

The bulk of the loss this week came on Wednesday after the release of a bearish government report. The U.S. Energy Information Administration said yesterday that crude oil inventory levels rose by 6.8 million barrels,…




Oilprice - The No. 1 Source for Oil & Energy News