This week’s market sentiment was in many ways influenced by the IMF’s cutting global growth rates to their lowest since 2009 (at 3 percent), dropping them for the fifth consecutive time already this year. The root cause has barely changed – unresolved US-China trade tensions with significant potential for further sanctions, and we have already seen a freight rate explosion (almost all continents witnessed actual freight rates doubling or tripling after COSCO was listed by the Trump Administration). Sure, the freight panic has subsided a bit this week as refiners simply cut their spot purchases because exorbitant rates rendered many crudes economically unviable, but in the current circumstances, one never knows when the next great sanctioning blow could come.
Apparent advances in Brexit talks boosted the market on Monday-Tuesday, yet initial positive reports were played down by both the European Union and Ireland, claiming that there is still a lot of work to be done. As a consequence, the global benchmark Brent traded at $59.2-59.5 per barrel, whilst US benchmark WTI was assessed at $53.2-53.5 per barrel Wednesday afternoon.
1. India Finding it Hard to Wake Up from its Slumber
- Once the projected to be the world leader in oil demand growth, Indian crude imports have fallen to 3.9mbpd, plummeting to the lowest level since August 2017.
- As India’s industrial production moved into negative territory in August 2019,…