Oil, the downward trend for the barrel of Brent
Consumers don’t know it yet and don’t perceive it, but for next winter’s heating and “probably” also for the price of petrol, they might be more confident. Why? Because the price of oil, Brent is the European benchmark, is falling and the downward trend seems to be continuing. $70 a barrel, a price that has not been seen since 2021. 10 dollars less in just two weeks and above all a downward trend that seems to be increasingly consolidating. Several observers agree on this trend and are convinced that the price of 60 dollars per barrel could be reached in a fairly short time. And the main responsible for this trend is that oil production is very strong compared to world consumption. And this trend seems to be increasing. Further confirmation of this evolution comes from the comments of many analysis companies convinced that Oil demand will increase by about a million barrels a day, against an increase in production of about 1.5 million except for the expanded version of OPEC with the United States, Brazil, Canada, and Guyana leading the way.
Oil, China in slowdown asks for less “black oil”
But more specifically, what caused this bearish trend to persist? Mainly two factors. The first one a weak and unexpected question. China in fact has slowed, weakened above all by a gigantic crisis in the real estate and construction sectors. And, on top of that, the boom in American employment has shown signs of slowing. The second one concerns the downward forecasts of demand expectations. The body most concerned with prices, OPEC, has cut its forecasts for two consecutive months considering the possibility of widening supply cuts after the sharp drop in oil prices. Among these, Saudi Arabia needs, according to the IMF, that the price be 100 dollars to avoid running a deficit. And immediately after Russia that between sanctions and decreases in the price of Brent could find it even more difficult to finance the war. We will see but, for now, the trend of heating costs for next winter can make consumers breathe a sigh of relief.
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