Oil futures continued to decline today despite increasing geopolitical tensions.
The market could remain under pressure as prospects of future increases in supply from OPEC+ overshadow lingering fears over escalating tensions in the Middle East in addition to the concerns about demand levels.
OPEC+ could start phasing out its production cuts in December, potentially putting more pressure on prices. At the same time, concerns about demand, particularly from China, remain prominent.
The Chinese manufacturing sector contracted in September, pressuring crude oil prices. However, the recent announcement of stimulus measures may help improve economic growth in the coming months and drive more demand for crude.
The ongoing conflict in the Middle East has not significantly impacted the oil supply for the moment, leaving the market’s reaction relatively muted. Meanwhile, traders could monitor U.S. crude oil inventory data to assess demand levels in the U.S. Larger-than-expected drawdowns could help stabilize the market.
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