Current Oil Prices Drop with Demand Concerns
The current oil prices reflect a sharp fall as Europe and China’s respective sets of economic data sparked concerns about world demand.
The crude price per barrel of Brent for delivery in November shed $3.40 to $108.17. Meanwhile, the crude price per barrel of the U.S. benchmark ended lower by $3.75, at $88.14.
Brent crude reached its highest in four months – $117.95 – last September.
A lot of factors that caused the rise in current oil prices, like tensions between Israel and Iran, are starting to decline. In the previous days, the energy industry realigned itself in a remarkable way. Recently released data coming from China was just was one of the reasons that led to the latest decline in crude oil prices.
The data showed that the services sector of China grew slowly in the month of September. This report arrived days following other data from the government that showed a continuous slowdown in manufacturing.
China is a main importer of commodities and a manufacturing slowdown in the country creates a major setback for global demand. That, in conjunction with weakness in various economies throughout Europe, indicates that there will be a lot of supply.
U.S. crude fell 4.1% due to a combination of too much supply and very low demand. U.S. inventories have reached their peak level not seen in 15 years.
In the meantime, worries over potential military action between Iran and Israel also lessened in recent days.