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Crude Oil Steady After Chinese Data

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Crude-oil futures were trading flat Thursday amid a paucity of market-moving news, after Chinese economic data provided a reminder of the potential for a slowdown in demand for oil.Overnight Chinese data showed refinery run rates at a record high for September, but economic growth in the Asian powerhouse slowed for the seventh consecutive quarter. The latter, PVM said in a note, is a potential drag on oil prices as it serves as a reminder that “the price of crude oil is determined more by demand [both physical and financial] than by the supply/demand balance.” At 0935 GMT, the front-month December Brent contract on London’s ICE futures exchange is up 14 cents at $113.36 a barrel.

 

The front-month November light, sweet crude contract on the New York Mercantile Exchange is trading 4 cents higher at $92.16 a barrel. Saxo Bank’s head of commodities strategy, Ole Hansen, saw some positives in signs of a pickup in China’s September activity, but said crude oil is stuck in a range with the risk more to the downside, after Brent made several failed attempts at $115 a barrel. The market is still torn between the ever-present demand concerns and geopolitical concerns in the Middle East, VTB Capital analyst Andrey Kryuchenkov said in a note. He prefers a “deeper small pullback” for Brent prices to late September and early-October lows, with support at $111 a barrel.

 

Also Thursday, Goldman Sachs Group Inc. lowered its oil price forecasts for 2013 and 2014 to $110 a barrel, but warned that the price the Organization of the Petroleum Exporting Countries’ members need in aggregate to balance their budgets will rise to $100 a barrel by 2015 from $90 a barrel now. “Given this increase, OPEC may be more aggressive in trying to defend a relatively high price,” Goldman said.

Read more: https://www.foxbusiness.com/news/2012/10/18/oil-futures-crude-steady-after-chinese-data-puts-demand-in-focus/#ixzz29hxu80YC