Despite the geopolitical tensions, Crude oil prices plunged at the beginning of November 2023 itself with huge margins that stunned the market players as after the weekly decline prices were as low as four months ago.  The rising inventories and improving supplies eased the prices of Crude oil globally as they were the key contributors to the weekly downturn.

Surprisingly, Crude oil prices plunged to their lowest levels (in past 4 months) at the beginning of November, primarily due to concerns about softening demand from the world’s largest consumer, China. Despite Saudi Arabia and Russia's commitment to reducing oil production, both benchmarks were traded low due to concerns about declining refining profits and weakening demand from China, which could limit further price increases. This week, both the benchmarks i.e., WTI and Brent Crude oil declined by by more than 5%, which is a significant drop compared with the previous week amid the shift in the Middle East geopolitical tensions. In view of the current market dynamics and conditions, the prices of Crude oil have continued to follow the bearish trend observed in the current market dynamics and conditions with the relevant factors impacting the final prices of the quoted offers standing at USD 78.02 per barrel for WTI and USD 82.37 per barrel for Brent with a decline of 6.2% and 4.2% respectively in the second week of November 2023.

The poor economic data from China overshadowed the impact of Saudi Arabia and Russia's extension of output cut which dampened the demand outlook for Crude oil for future weeks as well. Additionally, increased Crude oil production in Nigeria and Angola, as well as in the US also placed downward pressure on prices. On the demand side, China's Crude oil imports in October showed strong growth compared to both the previous year and the previous month. However, total exports from China contracted at a faster rate than expected, raising concerns about the overall Crude oil demand. Furthermore, the strengthening of the U.S. dollar made oil more expensive for holders of other currencies, further contributing to the decline in oil prices.

As per ChemAnalyst, lifting of Venezuela sanctions will help augment global Crude supplies, as more Venezuelan oil gets exported to the natural home in the US Gulf Coast which may ease down the price a bit. Furthermore, Saudi Arabia and Russia confirmed that they will extend their voluntary production cuts beyond the end of the year, and it could help to stabilize or even lift Crude oil prices by the end of the year 2023.