Oil prices remain under pressure from low global demand

Oil prices remain at a 4-month low amid falling global demand and OPEC+'s decision to increase oil production, which is putting pressure on commodities used to make biofuels.

 

Eight oil-exporting countries from OPEC+ (Saudi Arabia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, Oman, and the Russian Federation) agreed on October 5 to increase oil production by 137,000 barrels per day, although the market expected a larger increase in production, so prices rose.

 

December Brent crude futures rose 1.6% to $65.5/barrel on Monday after falling 4.6% to a 4-month low last week.

 

OPEC countries increased oil production by 138,000 barrels per day in April, by 411,000 barrels per day in May, June and July, by 548,000 barrels per day in August, and by 547,000 barrels per day in September. Saudi Arabia, which has the ability to increase supplies, is pushing for an increase in production quotas, while Russia is opposed to this in order to keep prices high.

 

Ukraine has attacked at least 15 Russian oil refineries over the past two months, exacerbating the Russian fuel crisis and limiting its ability to export crude oil: in the first fifteen days of September, exports of petroleum products from the Russian Federation fell to 1.94 million barrels per day, the lowest monthly average in over 3.25 years.

 

The reduction in oil supplies from the Russian Federation has not affected world oil prices, as the main buyers of Russian oil, China and India, are under strong sanctions pressure from the United States, and their economies are slowing down against the backdrop of imposed tariffs, so oil consumption is decreasing.