Oil is expected to drop for a third week as concerns about demand mount

 Oil is expected to drop for a third week as concerns about demand mount

Furthermore, Chinese refiners, who purchase the most crude oil from Saudi Arabia, the world's biggest exporter, requested a reduction in Saudi Arabia's supply for December.

This week's weak Chinese economic statistics heightened concerns about declining demand.

Although oil prices increased on Friday, they are expected to decline for a third week due to decreasing demand and the focus of the market on OPEC and its allies this month for a crucial meeting that will decide the group's next course of action on output.

At 1109 GMT, the January contract for Brent oil was up 84 cents, or 1.1%, at $80.85 a barrel, while the December contract for U.S. West Texas Intermediate (WTI) crude was up 78 cents, or 1%, at $76.52.

per contract is expected to decline by around 5% per week.

"Concerns about demand have replaced the fear of production outages related to the Middle East conflict," stated Commerzbank.

This week's weak Chinese economic statistics heightened concerns about declining demand. Furthermore, Chinese refiners, who purchase the most crude oil from Saudi Arabia, the world's biggest exporter, requested a reduction in Saudi Arabia's supply for December.

When the Organization of the Petroleum Exporting Countries and its allies, headed by Russia, convene on November 26 to decide on production strategy, the main topic of discussion will be whether Saudi Arabia will continue the 1 million barrel-per-day voluntary reduction that is scheduled to conclude this year.

"We believe the chances which Saudi Arabia will extend its unilateral … cut to the end of 1Q24 is certainly increasing given increasing market concerns about Chinese demands and the broader macro viewpoint," Helima Croft, an analyst at RBC Capital Markets

Citi analysts predicted in a report on Thursday that after prices earlier this week dropped to their lowest point since July, the negative pressure would eventually abate and prices would rise.

"We expect prices for combining, and we maintain our near-term prices projections with support expected to be forthcoming from refinery maintenance easing as well as a shift in the risk-reward for speculators following the recent sell-off," said Citi.