Global oil supplies have become increasingly tight since late June as Saudi Arabia and Russia cut production. Indeed, the latest energy report by the International Energy Agency (IEA) revealed that global oil demand grew by 3.26 million barrels per day in Q2, reaching an all-time high of 103 mb/d.
In China the worsening property crisis has raised serious concerns about the health of the economy in the world's biggest oil importer, and lowered risk appetite across markets which has help limit the upside to prices.
Additional, manufacturing data released on Wednesday from a host of purchasing managers' index (PMI) surveys painted a grim picture of the health of economies across the globe.
Japan reported shrinking factory activity for a third straight month in August. Euro zone business activity also declined more than expected, particularly in Germany. Britain's economy looked looks set to shrink in the current quarter, in danger of falling into recession.
Markets are also looking for hints on the outlook for interest rates when Federal Reserve officials and policymakers from the European Central Bank (ECB), the Bank of England and the Bank of Japan head to Jackson Hole, Wyoming, on Thursday.
Talk has shifted to keeping interest rates around where they are now - but for longer than perhaps previously estimated - rather than raising them further.
On the supply side, Iran's crude oil output will reach 3.4 million barrels per day (bpd) by the end of September, the country's oil minister was quoted as saying by state media, even though U.S. sanctions remain in place.
Saudi Arabia will likely roll over a voluntary oil cut of 1 million barrels per day for a third consecutive month into October, five analysts said, amid uncertainty about supplies and as the kingdom targets drawing down global inventories further.
The ongoing tug of war between a fragile supply situation (adding upward price pressure) and weak global economic data (adding downward price pressure) is likely continue as we had into the Autumn.
Fuel card users can expect a price movement of between 1 – 1.5 pence per litre as we head into the final week of August.
