Oil ended the week with a decline, fearing weak demand from China

Oil ended the week with losses, despite a short-term recovery at the beginning of the week. Brent fell to $71.80 per barrel today, and WTI – to $67.54. Over the week, Brent lost 3%, and WTI – almost 4%.

Chinese refineries reduced oil refining by 4.6% in October compared to last year. The reasons are the closure of factories and a decrease in operating performance at small independent refineries.

Investors are increasingly worried about the state of the Chinese economy, which is the largest consumer of oil in the world. The situation is aggravated not only by the decline in oil refining, but also by the slowdown in industrial growth and serious problems in the real estate market. In this context, statements by Fed Chairman Jerome Powell that the Fed is in no hurry to lower interest rates also have a restraining effect on prices. 

The negative mood in the market is also confirmed by forecasts for oil demand. The IEA predicts an oversupply of oil over demand by more than 1 million barrels per day in 2025, even with OPEC+ production cuts.

However, gasoline inventories in the United States over the past week fell to the lowest level since November 2022, which may affect future price fluctuations.