Oil prices fell another 3.6%, but vegetable oil quotes barely reacted

Yesterday, oil prices fell another 3.6% to a 16-month low, having already lost 11.3% of their price in September on expectations of a reduction in global energy demand and news of a slight increase in imports from China.

 

Morgan Stanley also lowered (for the second time in two weeks) its forecast for Brent oil prices in the 4th quarter from $80 to $75/barrel, which increased the pressure on quotes.

 

News from China was mixed for energy demand and crude oil prices. On the one hand, in August, the country increased imports by 0.5% (y/y) against expectations of a 2.5% increase. On the other hand, exports during this time grew by 8.7% (y/y) against expectations of a 6.6% increase, which was the largest increase in 17 months.

 

November futures for Brent oil yesterday fell by 3.6% to a 16-month low of $69.2/barrel (-6.8% for the week, -17% for the month), and for US WTI oil - by 4 .4% to $65.1/barrel (-6.8%, -18.3%).

 

Oil prices were largely unresponsive to Tropical Storm Francine, which strengthened into a hurricane in the Gulf of Mexico, potentially shutting down businesses in the region, which is home to 48 percent of U.S. refining capacity and 20 percent of U.S. oil production.

 

A sharp speculative drop in crude oil prices has had little impact on vegetable oil quotes, as traders expect oil prices to recover in the near future.

 

October palm oil futures on Malaysia's Bursa exchange fell 1.2% for the week to 3,885 ringgit/t, or $885/t.

 

December soybean oil futures in Chicago for the week fell by 3.5% to $872/t (-2.3% for the month).

 

According to Trading Economics, the average price of soybean oil with delivery to buyers for the week increased by 1% to $945/t against the background of reduced offers from Ukraine and the Russian Federation.