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Since the beginning of the year, global oil consumption has increased by 850,000 barrels per day.
On November 6, oil prices rose after previously hitting a two-week low, as fears of oversupply eased, Reuters reported. However, demand in the market remains weak.
Brent crude rose by 17 cents (0.27%) to $63.69 per barrel, while U.S. West Texas Intermediate (WTI) climbed 18 cents (0.3%) to $59.78 per barrel. According to the outlet, global oil prices had fallen for three consecutive months through October amid concerns that production levels were exceeding demand. This decline followed increased output by OPEC members and their allies, along with continued growth in production from non-OPEC countries.
By late October, however, the trend began to shift. U.S. and U.K. sanctions against major Russian oil companies eased downward pressure on prices, while OPEC+ plans to pause further production increases in the first quarter of next year also helped reduce fears of market oversupply.
Still, concerns about weak demand persist. From the start of the year to November 4, global oil consumption rose by 850,000 barrels per day — less than J.P. Morgan’s earlier forecast of 900,000 barrels, the bank noted in its analysis.
“Our high-frequency indicators show that U.S. oil consumption remains low. We see weak travel activity and a decline in container shipping,” the note said.
As previously reported, the market continues to underestimate the impact of the latest round of sanctions against Russia, which are beginning to affect supply. Prices partially rebounded after the U.S. announced restrictions on two of Russia’s largest oil companies. Prior to that, benchmark oil futures had been at a five-month low amid expectations that supply would outpace demand in the coming months.
