Oil Market Faces Pressure: Prices Drop Over 2%

Crude oil prices saw a significant decline during trading on Friday, dropping more than 2%. This downturn reflects escalating concerns among investors regarding the future market outlook, primarily driven by fears of weakening demand for oil from China, the world's largest consumer of crude.

Today's Crude Oil Price Performance:

U.S. oil contracts recorded a decrease of 2.22%, with the price per barrel falling to approximately $68.59. Similarly, Brent crude contracts dropped by 2.07%, settling at around $72.87 per barrel. This performance highlights the challenges currently facing the market, prompting investors to reassess their strategies.

Factors Contributing to the Decline in Oil Prices:

The sharp decrease in oil prices can be attributed to growing worries about a decline in Chinese demand for crude oil. Recent economic data released from China indicated a slowdown in growth during the third quarter of this year, intensifying these concerns.

Official figures from the National Bureau of Statistics of China, released on Friday morning, show that the country's economy grew at an annual rate of 4.6% in the third quarter of 2024. While this growth rate met expectations, it fell short of the previous quarter's rate of 4.7%, raising alarm bells about potential weakening demand for oil.

Additionally, the decline in crude oil prices coincides with fears of an oversupply in the market as Libyan oil production returns to normal levels. SP Global, a U.S.-based financial analytics firm, reported that Libyan crude oil exports have rebounded, as evidenced by data indicating the loading of 600,000 barrels of Sharara crude at the Zawiya port on October 15, marking the first shipment since August 3.

Overview of Other Commodity Contracts:

In other commodity markets, heating oil contracts fell by 1.79%, reaching approximately $2.1553. Gasoline contracts also experienced a decline of 2.36%, settling around $1.9990. Meanwhile, natural gas contracts saw a drop of 3.15%, priced at $2.273 per million British thermal units.

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