Crude oil futures continue to decline as recent developments in the Middle East have shifted the market’s risk perception. Following the limited confrontations in the region over the weekend, markets see reduced escalation risks.
In addition, supply disruption fears subsided as oil infrastructure was not targeted. While caution could remain present on the market due to the potential for renewed hostilities, the immediate outlook appears more stable.
Easing geopolitical concerns could lead to further downward pressure on global crude prices.
Meanwhile, the demand outlook for oil, particularly in Asia, remains subdued. October import figures are expected to decline compared to previous months, with a notable decrease in Chinese crude imports affecting the overall demand outlook.
Although there is some hope that China’s economic stimulus measures will revive its economy, the focus on consumer spending and electric vehicles may not significantly increase crude oil consumption. Weak demand could further push global crude prices down, especially if OPEC+ follows through with its plans to raise production.
