These were on top of the April cuts agreed by several OPEC+ producers running to the end of 2024.
Since then, there has been a certain retreat, mostly on now chronic uncertainty about the resilience of Chinese demand and a strong U.S. dollar.
The Chinese concern remained in place despite a fresh report indicating demand for oil in the world’s largest importer remained robust. In August, China’s oil imports jumped by over 20% from July, and by 31% from August 2022.
In the US demand remained strong as crude oil stockpiles drew down by 6.3 million barrels last week, falling for a fourth consecutive week and down over 6% in the last month, government data showed adding to further to a tight supply situation as the American driving seasons comes to an end.
U.S. oil inventories have been on the decline for four weeks in a row now.
“If these draws are not a sign of resilient domestic demand in the world’s largest economy, what is?” Phillip Nova senior market analyst Priyanka Sachdeva told Bloomberg.
While predictions of triple-digit oil prices are once again making headlines and the OPEC+ production cuts have limited downside risk, demand concerns persist and could cause problems further down the line.
In the UK retail space price pump prices have reached the highest this year with the average cost of diesel at over £1.50 per litre adding to an already grim picture as households continue to battle the cost-of-living crisis and whilst inflation is finally falling, persistent higher oil prices could easily derail its progress.
RAC spokesman Rod Dennis said: “Drivers had already seen a sharp increase in pump prices through the course of August because of the oil price rising”.
“An even higher oil price is likely to force wholesale fuel prices up further, and – if these are sustained – that’s likely to spell further price rises on forecourts up and down the UK in the coming weeks.”
Fuel card users can expect a further increase next week in the region of 1.5 pence per litre depending on their card type.
