Crude oil futures traded slightly lower during Asian trading hours on Tuesday, though benchmarks remained near the monthly highs reached in the previous session.
As of 06:35 GMT, front-month October 2024 ICE Brent futures were priced at $81.76 per barrel, down from Monday’s settle of $82.30 per barrel. Similarly, September 2024 NYMEX WTI futures were trading at $79.60 per barrel, compared to Monday’s settle of $80.06 per barrel.
The recent rebound in oil prices has restored levels above those seen before the brief financial turmoil triggered by the unwinding of the yen carry trade. Saxo Group noted that oil prices recovered from a seven-month low due to improved risk appetite, positive U.S. jobs data, and a sixth consecutive weekly decline in U.S. crude inventories.
This week, prices were also buoyed by escalating tensions in the Middle East, notably concerns that Iran might retaliate against Israel for the recent killing of a senior Hamas figure in Tehran.
However, crude prices experienced volatility due to weak refining margins. Asian gasoil cracks declined as paper margins fell to their lowest levels since May, driven by a regional oversupply and further weakness in the European market. Broker data from Monday revealed a drop in the Singapore month-ahead 10ppm gasoil crack to front line Brent futures, falling by $1.05 per barrel to $14.65 per barrel.
Despite these fluctuations, investors largely overlooked Monday’s OPEC report, which revised down its 2024 oil demand forecast due to weaker expectations for Chinese consumption. OPEC now estimates a growth in crude oil demand of 2.1 million barrels per day (bpd), down from the July forecast of 2.235 million bpd.
Attention is now turning to upcoming U.S. inflation data, which will be closely watched for indications on whether the Federal Reserve will proceed with its anticipated first rate cut in September.
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