The outlook for oil demand remains challenging as prospects of new mobility restrictions continue to rise. Lower refining margins and a rising possibility of storms in the US are leaving little room for refiners to increase their demand materially. Elevated inventories of oil and oil products remain another drag for the sector, per ANZ Bank. WTI holds gains near $40.50 on Friday but is heading for a weekly loss.

Key quotes

“The recovery in oil demand is slowing as mobility restrictions are reimposed in some countries. Rising daily COVID-19 case numbers are the key risk to a sustainable recovery in energy demand.”

“Demand for oil products is constrained by several factors at the moment. Subdued refining margins could lead to longer maintenance shutdowns. The increased likelihood of hurricanes in the US due to La Niña may disrupt refinery operations.”

“Inventories have started normalising from their Q2 highs. The level of global floating storage has been retreating as well. Nevertheless, stocks remain burdensome and recent steepening of the forward curve suggests a well-supplied market.” 

“LNG fundamentals look promising. Demand is recovering on the forecasts of colder winter, as there are likely to be more days in the US with temperatures that will prompt domestic heating. Diverging Asian and US LNG prices makes US gas more competitive. China can ease coal import restrictions to impede the rise in domestic prices and replenish its coal inventories ahead of winter demand.”


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD edges above 1.18 amid mixed US data, slim stimulus hopes

EUR/USD is trading above 1.30 after US Durable Goods Orders beat expectations but Consumer Confidence missed estimates. Hopes for a US stimulus deal are slim with a week left until the elections.


GBP/USD stabilizes above 1.30 amid Brexit and covid uncertainty

GBP/USD is hovering above the round 1.30 levels as rising UK COVID-19 cases, uncertainty about Brexit, and PM Johnson's political problems weigh on sterling. US data has been mixed.


XAU/USD pares early gains, turns flat near $1,900

For the third straight trading day on Tuesday, the XAU/USD pair is moving sideways above $1,900 as participants wait for the next significant catalyst. After climbing to a daily high of $1,910 earlier in the day, the pair lost its traction and was last seen trading virtually unchanged on the day at $1,902.

Gold News

Bitcoin breaks new yearly highs; the road to $15,000 is clear

Bitcoin breaks new yearly highs and hits $13,464. The road to $15,000 is clear as there are no major resistance levels above the current price.

Read more

WTI trims losses and moves near $39.00/bbl ahead of API

Following two consecutive daily pullbacks, prices of the West Texas Intermediate regain some buying interest and reach the $39.00 mark per barrel on turnaround Tuesday.

Oil News