The International Oil Market Will Remain Under Pressure in the Short Term

International oil prices remain low as global oil demand recovers slowly. On Sept. 14, WTI crude futures closed at $37.26 a barrel, down 0.19%. Brent crude futures closed 0.55 per cent lower at $39.61 a barrel.

From the supply side, "Opec +" to reduce the scale of production, exacerbating market anxiety. Since August, Opec + has cut the cartel's output from 9.7 million barrels a day to 7.7 million. Russia's apparent increase in output has brought downward pressure on international oil prices. Novak, Russia's energy minister, said it was vital for Russia to regain market share as quickly as possible in the context of recovering oil demand, even as competition between oil producers dwindled.

On the demand side, new cases rose again in many countries around the world, undermining expectations of economic recovery, and the end of the U.S. gasoline demand season, refinery maintenance season began to curb oil prices.

In its monthly report released on Wednesday, Opec forecast that global oil demand in 2020 would fall by 9.46 million b/d year on year, up from 9.06 million b/d in its August report, and cut its forecast for global oil demand growth in 2021 by 370,000 b/d to 6.62 million b/d.

More than 1,000 new cases were confirmed in a single day in at least 14 countries, including India, the US, Brazil and others, raising concerns about the outlook for oil demand. Russian Deputy Energy Minister Sergei Sorokin said it could take two to three years for global oil demand to return to the level of 2018-2019. He believes that led by the economic recovery in Asia and Latin America, the aviation and tourism industry will revive, perhaps 1 million to 3 million barrels per day of demand increase, but the epidemic will still reduce western countries' business travel, which will slow the recovery of oil demand. Saudi Aramco said Tuesday that it will cut the price of light crude oil exported to Asia in October by $1.40 per barrel, more than the $1 per barrel in September and exceeding market expectations.

The move was seen by the market as a sign of weak demand for oil. High inventories and excess capacity will limit the upside of oil prices, the EIA said in its short-term energy Outlook released On Thursday, forecasting an average spot price of $44 per barrel for Brent in the fourth quarter of 2020. Brent oil prices will rise to $49 a barrel in 2021 as supply and demand in the international crude oil market become more balanced.

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