Crude oil slumps as supply side issues eased – ANZ
|A de-escalation of tensions in the Middle East would likely see the geopolitical risk premium evaporate quickly, ANZ commodity analysts note.
US domestic demand remains strong
“The US said that Israel Prime Minister Benjamin Netanyahu had accepted a bridging proposal that aimed to resolve differences between Israel and Hamas. A de-escalation of tensions in the Middle East would likely see the geopolitical risk premium evaporate quickly. Elsewhere, production at Libya’s Waha oil field has returned to normal levels of about 300kb/d after pipeline maintenance was completed earlier than expected.”
“However, the nation’s Sharara field remains offline amid a political dispute between its rival governments. Demand in China remains a concern. While summer travel in the country has been strong, the use of high-speed rail and electric vehicles has taken the edge off gasoline consumption.
“Sales at China’s two biggest retailers, PetroChina and Sinopec have dropped more than 5% since the start of July, according to a Bloomberg report. That’s not the case in the US, where domestic demand has been strong. Bookings for domestic travel over the US Labor Day weekend are up 9% y/y, according to motor club AAA.”
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