Oil prices have risen slightly this week. Due to new economic data, sentiment about the global economy is currently somewhat more positive. Nevertheless, the market seems to expect that the supply will not increase for the time being.
The oil price has corrected upwards after last week's decline. On Thursday, August 24, Brent oil was trading at $82,92. At the time of writing, the oil price is more than $2 higher, at $85,35.
Oil prices rose mildly after mixed economic data. The Chinese economy shrank for the fifth month in a row in August. However, optimism about the Chinese market seems to be emerging again. The contraction of the economy appears to be leveling off. China's Purchasing Managers' Index (PMI) rose from 49,3 to 49,7 in that month. A PMI above 50 means that an economy is growing. If a PMI falls below that value, the economy will shrink. It is still a bit too early to speak of a turning point. However, market confidence appears to have increased. The expectation was that the Chinese market would again shrink more than the previous month. Now that the contraction is easing, it seems possible that the market will turn towards growth again. According to analysts, even slight growth in the third quarter can no longer be ruled out.
At first glance, sentiment about the United States economy is much less optimistic. New data shows that US GDP grew less quickly than expected in the second quarter. GDP rose by 2,1% while forecast growth was 2,4%. Yet the undertones in the new data are positive. The strict interest rate policy of the American Central Bank (Fed) appears to be paying off. Inflation has declined further and growth expectations for the second half of 2023 are largely favorable.
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The optimism seems to be confirmed by American data on oil reserves. Data from the US Energy Agency (EIA) shows that US oil reserves in private hands have fallen more than expected. Reuters polls show the market expected inventories to fall by 3,3 million barrels last week. However, the new data shows that oil inventories have fallen by as much as 10,6 million barrels. The stronger decrease is the result of greater consumption and a decrease in imports. In total, imports decreased by more than 4,1 million barrels. In addition, consumption increased by about 8,7 million barrels, while national production remains unchanged at 12,8 million barrels per day.
In addition, rumors are circulating that Russia and Saudi Arabia are maintaining their lower production targets. This is evident from a Reuters survey. Since July, Saudi Arabia has cut their production by 1 million barrels per day. In August, Russia decided to support the Saudi production decline with a cut of 500.000 barrels per day.
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The diesel price rose less than the oil price this week. On Thursday, August 24, diesel was trading for €137,25 per 100 liters. Until Monday, August 28, the price of diesel rose to €141,13. The diesel price then came under pressure, causing the price to drop to €138,68.