- According to official Chinese data, the world's second-largest economy grew by 4.9% this year in the third quarter, which fell short of the 5.5% expected by analysts.
- Investors will pay attention to the OPEC+ Joint Ministerial Oversight Committee (JMMC) meeting.
- A bearish demand outlook may prompt OPEC+ to postpone any increase in production.
International oil prices fell on Monday due to China’s economic growth rate in the third quarter, which was lower than expected. China’s energy demand is still inevitably dragged down by the renewed surge in the number of new coronavirus infections in other countries around the world.
At 17:04 Beijing time, NYMEX crude oil futures fell 0.27% to $41.01/barrel. ICE Brent crude oil futures fell 0.31% to $42.80/barrel.
The U.S. dollar index fell more than 0.2% to 93.487 in the day because President Donald Trump said that he wanted a stimulus plan larger than that of House Speaker Nancy Pelosi (D-CA).
He believed that if Speaker Pelosi agreed to his economic stimulus plan, then Republican lawmakers will support his plan.
According to official Chinese data, the world’s second-largest economy grew by 4.9% this year in the third quarter, which fell short of the 5.5% expected by analysts. The refinery in the world’s second-largest oil production slowed down processing in September.
Howie Lee, an economist at the Overseas Chinese Bank (OCBC), said that Chinese data shows that the growth of goods and services is slowing, while crude oil processing data is disappointing. “We may witness oil prices weaken during the rest of the day.”
Due to inventory, import quotas for high-end enterprises and independent refineries are expected to slow down in the fourth quarter of the oil purchasing frenzy that China started at the beginning of this year. Investors will pay attention to the OPEC+ Joint Ministerial Oversight Committee (JMMC) meeting to be held later on Monday.
The JMMC meeting may decide whether to postpone the increase in production. According to the established plan, oil-producing countries will reduce the current output reduction of 7.7 million barrels per day by 2 million barrels per day starting from January next year.
However, Lee believes that even if OPEC+ makes the decision, oil prices will not rebound as a result. The market has digested this expectation to a considerable extent.
The OPEC+ Joint Technical Committee meeting report released last week showed that oil-producing countries expect a bleak outlook for fuel demand, worrying that the second wave of the new coronavirus epidemic will last longer. It said Libya will increase production and increase the global oil surplus in 2021.
Analysts, including the US investment bank JP Morgan and some OPEC observers, agree that a bearish demand outlook may prompt OPEC+ to postpone any increase in production.
Analysts said in a report that “more and more people are calling for OPEC+ to cancel the current production increase plan.”
However, the market may have to wait until the next OPEC+ meeting on November 30 and December 1. It is possible to make any specific decisions.
As the world’s largest oil producer, US energy companies added oil and natural gas rigs last week, an increase that hit a new high since January, as producers restarted production capacity. In the past few months, oil prices have remained at around $40 per barrel.
During the visit of Israeli and American delegations to Manama last Sunday, Bahrain and Israel signed a joint deal officially opening a new page in the relations between the two countries. Washington hopes that this move can expand the existing cooperation, that is, Bahrain, with its wealthy economic conditions, will enhance its status as a “bridgehead” against Iran.