Demand for oil is stronger than expected, and the decision by Saudi Arabia and Russia to retain output cuts for now, bolster the price outlook.
Oil has surged higher this month, trading above $US90 a barrel for the first time in more than 10 months, and that’s led RBC Capital Markets to reset its forecast for the commodity for the final three months of the year.
Mr Tran said the fact that product cracks led the oil complex higher the past few months was clearly indicative of strong demand stemming from a resilient and relatively price inelastic consumer rather than purely a Saudi-led supply-side push.RBC forecasts US and Brent prices averaging $US86.50 a barrel and $US91.00 a barrel in the final quarter of this year. At 3.11pm in New York, US oil was trading at $US87.01; Brent was at $US90.06.
“Chinese crude imports set a record pace of 11.4 million barrels a day through the first half of 2023, registering three of the four strongest crude import months on record, and while macro demand weakness has remained a concern, we have yet to see Chinese refiners curb their appetite for crude imports. Given the directional tightening of physical balances, the rate of change of Chinese crude imports can dictate price path.
Coming out of turnaround season, refinery utilisation is now 5.3 per cent higher than it was at the end of June, pointing to another strong month for crude throughput, he also said.
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