August 30, 2024 (Investorideas.com Newswire) Oil futures advanced as the market grappled with potential supply disruptions in the Middle East, particularly from Libya and Iraq. Libya's oil production has been severely impacted by ongoing political instability, taking significant portions of its output offline and halting exports. Meanwhile, Iraq plans to reduce its oil output next month to comply with its OPEC+ quota. These developments have heightened concerns about tighter global oil supplies, driving prices upward.
However, the upside momentum in crude prices could be limited by ongoing concerns about weakened demand, particularly from China, the world's largest crude oil importer. China's leading state-owned oil companies, including Sinopec and PetroChina, posted strong profits from their exploration and production activities, but their refining divisions struggled due to lower domestic fuel demand amid an economic slowdown. Declining demand for diesel and a shift towards LNG-powered trucks further weighed on refining performance. Additionally, China's crude oil imports fell by 2.4% in the first seven months of 2024 compared to the same period in 2023, reflecting broader concerns over the country's economic health and future oil demand.
Recent U.S. inventory data showed a smaller-than-expected reduction in crude stocks, indicating potential softness in demand. The market remains cautious, with expectations of OPEC extending its production cuts to stabilise prices.
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