Last week’s fear and uncertainty in oil markets appears to have turned a bit more upbeat this week as oil producers tried to avoid a complete tailspin. Iran seems to have found a common language with UK authorities and the release of the 2 detained tankers now seems finally feasible. The US Trade representative infused market watchers with a bit of optimism in terms of global trade prospects by eliminating several items from the list of goods to be sanctioned by a 10 percent tariff whilst delaying the tariff-slapping on an array of products until December 15 to win precious time. But despite the positive shifts, crude prices collapsed on Wednesday after China reported an unexpected drop in industrial production growth, which was perceived as a harbinger of weakening crude demand.
It remains to be seen how crude markets will react to European economies slowing down, with both the United Kingdom and Germany plunging into negative territory in Q2 2019 and EU zone economic growth zeroing out.
1. Indian Oil Demand Has Stalled
- For the third month in a row, India’s crude demand has been hovering around the 4.05mbpd with no evident sign that further crude demand is to be expected in the upcoming months.
- This year’s June-August crude demand average is 8 percent lower than that of Jun-Aug 2018 and roughly on par with summer demand volumes seen in 2017.
- Indian domestic crude production has been gradually declining over…