Oil dips near 2-month lows as supply concerns ease

Published
4

Oil prices hovered near two-month lows on Monday as supply fears receded while concerns over China's fuel demand and rising interest rates weighed on prices.

Brent crude futures for January had slipped 28 cents, or 0.3 per cent, to $87.34 a barrel by 0103 GMT after settling at their lowest since Sept 27.

US West Texas Intermediate (WTI) crude futures for December were at $80 a barrel, down eight cents, ahead of the contract's expiry later on Monday. The more active January contract fell 21 cents to $79.90 a barrel.

Both benchmarks closed on Friday at their lowest since Sept 27, extending losses for a second week, with Brent down 9pc and WTI 10pc lower.

The front-month Brent crude futures spread narrowed sharply last week while WTI flipped into a contango, reflecting dwindling supply concerns.

Tight crude supplies in Europe have eased as refiners have piled up stocks ahead of the Dec 5 European Union embargo on Russian crude, putting pressure on physical crude markets across Europe, Africa and the United States.

The EU's energy policy chief told Reuters the EU expected to have its regulations completed in time for the introduction of a G7 plan to cap the price of Russian crude on Dec 5.

RBC Capital analyst Mike Tran said the weak December WTI contract expiration indicated paper market selling rather than true physical market softness.

“Tight global inventories do not support the traditional surplus of barrels rationale for contango,” he said in a note.

While North Sea and West African spot market indicators are far from strong, they are also not suggesting signs of distress, he added.

Diesel markets remained tight, with Europe and the United States competing for barrels. While China nearly doubled its diesel exports in October from a year earlier to 1.06 million tonnes, the volume was well below September's 1.73m tonnes.

Demand in the world's top crude importer remains bogged down by Covid-19 restrictions while expectations of further interest rate rises elsewhere have elevated the greenback, making dollar-denominated commodities more expensive for investors.

Opinion

Editorial

Risks ahead
Updated 02 Oct, 2026

Risks ahead

To think that the government would rather push out an elected government than grant a single prisoner some facilities does not square up rationally.
Exit from Iraq
02 Oct, 2026

Exit from Iraq

AMERICAN and British troops have once again shipped out of Iraq. On Wednesday, the foreign forces left the Arab...
Lahore’s ozone warning
02 Oct, 2026

Lahore’s ozone warning

LAHORE has received another warning that its air pollution crisis cannot be treated as a problem that begins with...
Fixing bond markets
Updated 01 Oct, 2026

Fixing bond markets

Pension funds, insurance companies, mutual funds, retail investors, and eventually, foreign investors must become bigger participants in the market.
Call centre rackets
01 Oct, 2026

Call centre rackets

A NUMBER of recent raids conducted by the authorities in different cities point to the growing threat fraudulent ...
Homeward bound
01 Oct, 2026

Homeward bound

FIVE months after Somali pirates captured an oil tanker carrying a 19-member multinational crew, Somali maritime...