For the Quarter Ending September 2024
North America
The third quarter of 2024 for Crude Oil prices in the North American region has been marked by a consistent downward trend, reflecting a challenging market environment. However, July witnessed an uptick in prices due to several disruptions in oil production as well as the peak driving season for Crude oil from the downstream industry. Early concerns about Hurricane Beryl's potential impact on offshore oil production in the Gulf of Mexico sent futures prices climbing.
Nevertheless, concerns about weakening global economic conditions, particularly in major economies, have dampened demand for energy products like Crude Oil. Adding to the bearish sentiment, the United States released disappointing economic data, including weaker-than-expected job growth and a contraction in the manufacturing sector during August. Henceforth, despite geopolitical tensions, crude oil prices were heavily impacted by the IEA revision in its global oil demand which showcased a downward trajectory during this timeframe.
In the USA specifically, compared to the previous quarter in 2024, there was a notable decline of 6% in prices culminating in a quarter-ending price of USD 70 per barrel for Crude Oil WTI.
APAC
In Q3 2024, the Crude Oil market in the APAC region experienced a mixed trend from bullishness to bearishness. July saw a continuation of the bullish trend in crude oil prices, reaching multi-month highs. Peak season drove the demand for Crude oil from the downstream lubricants and gasoline market putting further strain on already tight supplies. However, China, the world's largest oil importer, showed signs of economic slowdown during August which dampened expectations for oil demand from the Asian giant. Moreover, Saudi Arabia's announcement of a price reduction for its premium oil grade in the Asian market highlighted growing fears about declining demand. These factors combined to create a downward pressure on the market, resulting in the significant price drop seen in September. The significant drop of -20% from the same quarter last year was primarily driven by a combination of weakened global economic conditions, geopolitical tensions, and fluctuating demand-supply dynamics. The -7% decrease from the previous quarter further emphasized the negative trend to settle the price at USD 70/MT of WTI Crude Oil per Barrel during September.
Europe
In Q3 2024, the Crude Oil market in Europe witnessed a significant decline in prices, with Germany experiencing the most notable changes. However, several delays in oil production and the downstream industry's peak driving season for crude oil caused prices to rise in July. Futures prices rose in response to early worries about Hurricane Beryl's possible effects on offshore oil production which tightened the supply. However, worries about the deteriorating state of the world economy, especially in large economies, have reduced demand for energy supplies like crude oil. Europe’s unsatisfactory economic data, which included a contraction in the manufacturing sector in August, added to the pessimistic outlook. Since then, the IEA revision in its global oil demand, which showed a downward tendency over this timeframe, has had a significant impact on crude oil prices notwithstanding geopolitical tensions. This steady decline culminated in a quarter-ending price of USD 73/MT for Crude Oil Brent in Germany. The pricing environment in Europe during Q3 2024 reflected a consistent negative sentiment, characterized by a downward trend in Crude Oil prices.
MEA
The third quarter of 2024 for the Crude Oil market in the Middle East region has been marked by a significant decline in prices. However, in July, geopolitical tensions, particularly in the Middle East, have raised concerns about potential disruptions to the oil supply, exerting upward pressure on prices. Nonetheless, softer demand from major economies like India and China has countered these effects, leading to a decrease in overall prices. Refining margins have also tightened, impacting consumer interest and further dampening the market sentiment. The Organization of the Petroleum Exporting Countries (OPEC+) and its allies also hinted at a possible rise in oil output at the same time, which put more downward pressure on prices. Moreover, Saudi Arabia's announcement of a price reduction for its premium oil grade in the Asian market highlighted growing fears about declining demand. These factors combined to create a downward pressure on the market, resulting in the significant price drop seen in September. Henceforth, the price change from the previous quarter in 2024 stands at -6%, indicating a continued downward trajectory.
South America
Crude oil prices in the South American region have been steadily declining during the third quarter of 2024. However, several delays in oil production and the downstream industry's peak driving season for crude oil caused prices to rise in July. Futures prices rose in response to early worries about Hurricane Beryl's possible effects on offshore oil production in the Gulf of Mexico. However, worries about the deteriorating state of the world economy, especially in large economies, have reduced demand for energy supplies like crude oil. The United States' unsatisfactory economic data, which included lower-than-expected employment growth and a drop in the manufacturing sector in August, added to the pessimistic outlook. Since then, the IEA revision in its global oil demand, which showed a downward tendency over this timeframe, has had a significant impact on crude oil prices notwithstanding geopolitical tensions. Particularly in Brazil, weakened global economic conditions, geopolitical tensions, and fluctuating demand-supply dynamics led to a significant downtrend during September 2024.
For the Quarter Ending June 2024
North America
The US crude oil market faced significant challenges during the second quarter of 2024, exhibiting a fluctuating trend between bullish and pessimistic sentiment. During April 2024, a combination of increased geopolitical risk and supply interruptions has led to an increase in oil prices. According to the statistics, U.S. futures closed at a five-month high after it was reported that the Iranian consulate in Damascus, Syria, had been damaged by an Israeli missile strike.
However, during May 2024, the overarching bearish sentiment was primarily driven by high supply levels, resulting from the gradual lifting of production cuts by key oil-producing entities. A notable increase in US crude oil inventories further exacerbated the supply glut, while weak export orders and diminished global demand underscored the oversupply scenario. Additionally, high interest rates dampened economic activity, curtailing fuel consumption and contributing to the downward pressure on prices.
Focusing on the United States, the country saw the most significant price fluctuations within the region. The correlation between increased inventory levels and declining prices was evident, as was the impact of high interest rates on economic growth and oil consumption. Concluding the quarter, the price of WTI crude oil settled at USD 79 per barrel during June 2024.
APAC
The second quarter of 2024 has been particularly challenging for the Crude oil market in the APAC region which showed a mixed trend from bullishness to a bearishness. Based on the data, India received approximately 1.25 million barrels per day in April, a decrease of roughly 9% from March 2024 which created supply scarcity, and hence the prices of imported Crude oil surged during April 2024. Moreover, several outages at Russian refineries contributed to the disquiet in the product market, and OPEC+ exerted pressure on some nations to enhance adherence to the voluntary production cutbacks that were agreed upon until 2Q24. However, during June 2024, various critical elements shaped the market landscape, including an easing of geopolitical tensions and a substantial rise in US crude oil production. Additionally, OPEC+ members' decision to gradually phase out production cuts starting in October exacerbated the supply-demand imbalance, further depressing prices. High interest rates and increased global crude oil inventories contributed to waning demand, reinforcing the downward trend.
Europe
During the second quarter of 2024, the European crude oil market experienced considerable hurdles and showed signs of swinging between positive and negative emotions. A combination of rising geopolitical risk and supply disruptions has caused oil prices to rise in April 2024 following news that an Israeli missile strike had destroyed the Iranian consulate in Damascus, Syria, U.S. futures closed at a five-month high. However, during May 2024, the quarter was marked by a convergence of high supply levels and waning demand, influenced by the easing of geopolitical tensions and the absence of significant disruptions in oil production. Additionally, high interest rates and economic uncertainties contributed to a cautious economic environment, dampening industrial activities and consequently, oil consumption. The American Petroleum Institute's report of rising US stockpiles further amplified the global oversupply sentiment, exerting additional downward pressure on prices. Focusing on Germany, the country saw the most substantial price fluctuations within Europe. Concluding Q2 2024, the price of Brent Crude Oil in Germany settled at USD 83 per barrel, cementing the quarter's overall mixed pricing environment.
MEA
The second quarter of 2024 saw major obstacles for the Saudi Arabian crude oil market, which showed a trend of swinging between optimism and pessimism. During April 2024, a rise in oil prices was observed amidst supply disruptions and elevated geopolitical risk. Based on the data, U.S. futures ended the day at a five-month high following news that an Israeli missile strike had destroyed the Iranian consulate in Damascus, Syria. Predominantly, the uncertainty in global economic prospects due to high interest rates and inflationary pressures has tempered demand for crude oil during May 2024. Additionally, the geopolitical landscape has shifted, with easing tensions in key conflict zones previously known to elevate risk premiums. This, coupled with the OPEC+ decision to gradually phase out production cuts from October, has led to increased supply, intensifying the surplus. The American Petroleum Institute's reports of rising US crude oil inventories have further exacerbated the supply-demand imbalance, contributing to the price decline. Focusing on Saudi Arabia, the country has experienced significant price changes within this context. The latest quarter-ending price stands at USD 79/barrel of WTI crude oil in Saudi Arabia, reflecting a negative pricing environment driven by excess supply and waning demand during June 2024.
For the Quarter Ending March 2024
North America
The crude oil market in North America witnessed a stable to bullish trend during the Q1 of 2024. The market was primarily influenced by several factors such as the rising demand for oil due to the economic recovery, geopolitical tensions, and supply chain disruptions.
The IEA has drastically lowered the projected growth rate of the world's crude oil consumption in 2024 to just 1.2 million barrels per day. The increase in global oil prices during the Spring Festival holiday was aided by favorable conditions, and the fears about inflation may grow as U.S. producer prices rose more than anticipated in January despite sharp increases in service costs.
The market sentiments were also influenced by the OPEC+ decision to maintain the production cuts of 2.2 million barrels per day. The trend and seasonality analysis in Q1 of 2024 revealed a moderate increase in crude oil prices in the United States. Tightening Supplies and Strong Demand Drive the oil prices higher as the lower-than-expected decrease in US crude oil inventories swung the market sentiments higher. Extreme winter weather across much of the nation, but especially in North Dakota, the third-largest oil-producing state, caused a decrease in U.S. crude oil output which further affected the prices in recent times.
Asia Pacific
During the first quarter of 2024, the APAC region's crude oil market faced a range of challenges that affected market dynamics and prices. Geopolitical tensions in the Middle East continued to be a key factor, raising concerns about potential disruptions in oil supply and contributing to price volatility. The imposition of a windfall profit tax by the Indian government also had an impact on crude oil prices during this quarter. This tax discouraged investment in the oil and gas sector and reduced the competitiveness of Indian oil and gas companies in the global market. The increased consumption of petroleum products, such as bitumen used in road construction, was the cause of the growth in demand. Due to increased mobility, India's need for gasoline increased by 75,000 barrels per day annually. The rising demand for gasoline was also influenced by sustained strong vehicle sales in January, which rose by 15% year over year. According to the Petroleum Planning and Analysis Cell, the overall domestic consumption of downstream petroleum products has increased from 19757 (1000 per metric tonne) to 21091 (1000 per metric tonne) in India during March when compared to February 2024.
Europe
The crude oil market in the Europe region experienced significant fluctuations and challenges during the first quarter of 2024. The primary reason for these fluctuations was the increase in crude oil prices as OPEC+ countries implemented production cuts, resulting in a decrease in supply. Additionally, ongoing geopolitical tensions, such as the conflict in Yemen, contributed to market uncertainties and further impacted crude oil prices. Additionally, the US and the UK launched further attacks on the Red Sea, adding to the already high level of tensions which has surged the overall risk sentiment in the oil markets. The attacks by Houthi militants on commercial ships in the Red Sea persisted, causing shipping corporations to reroute their ships around the southern tip of Africa, resulting in higher transportation costs and longer travel times for bunker fuel. According to reports, ship operators sped up their vessels to reduce the two or three journeys from the Middle East to Europe, but the longer route still required nearly twice as long to travel as the Suez Canal which further added shipping delays during this timeframe.
MEA
The first quarter of 2024 for crude oil in the MEA region was marked by bullish market sentiment, with high demand and low supply. The global crude oil prices were impacted by various factors, including Saudi Arabia's voluntary supply cut and Russia's potential output cuts which escalated tensions in the Middle East. Mounting tensions in the Middle East, particularly around the Red Sea, raised concerns about potential disruptions to oil supplies. This risk premium has pushed prices up as traders anticipate potential supply shortages. Moreover, the International Monetary Fund's optimistic economic growth forecast for the year fuels demand expectations, further supporting higher prices. The alternative route around the Cape of Good Hope due to security concerns has caused major shipping delays and cancellations, impacting oil deliveries in the overseas market. In line with the announcement of Saudi Arabia which stated that the official crude oil supply for all regions, including its largest market in Asia, would be lowered in the second quarter. The overall market situation was optimistic about the rising concerns and hence, benchmarks increased, impacting the final prices of the quoted offers stood at USD 80 per barrel WTI during March 2024.
For the Quarter Ending December 2023
North America
The fourth quarter of 2023 was a challenging period for the North American crude oil market due to various supply and demand factors. The prolonged effects of the pandemic and the increasing shift towards renewable energy have led to a decline in demand for crude oil.
Moreover, the ongoing tensions in the Middle East, along with the uncertainty surrounding OPEC+ production policies, have further pressurized the market. Despite these challenges, the United States has emerged as a significant player in the global crude oil market, with a surge in production and exports.
The trend for crude oil prices in the USA has been bearish, with a decline of 2.1% compared with both the quarter. The main reasons for this decline are the increased inventory levels, weak demand, and uncertainty surrounding OPEC+ policies. The correlation between crude oil prices and the US dollar has been significant, with a negative trend observed throughout the quarter. The latest price of crude oil WTI per barrel in the USA at the quarter ending December 2023 was USD 73.05/ barrel.
Asia
In the fourth quarter of 2023, the APAC region experienced fluctuations in crude oil prices. Despite the supply cuts by major oil-producing countries such as Saudi Arabia and Russia which limited the availability of crude oil. The prices of Crude oil in the OPEC basket remained deteriorated. Furthermore, the easing of US sanctions on Venezuela opened up opportunities for Indian refiners to access cheaper crude oil, potentially reshaping their import landscape. This influx of Venezuelan crude oil provided a cost-effective alternative for Indian buyers and contributed to the overall demand for crude oil in the region. Additionally, the Indian government raised the windfall tax on domestic crude oil sales, which further affected the prices in the country. As per the reports, following the suits marketing companies (OMCs) including Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation reduce fuel prices during this timeframe. Overall, the APAC region experienced a bearish market for crude oil, with various factors influencing the prices. The quarter-ending price of crude oil WTI in India was USD 73 per barrel.
Europe
The fourth quarter of 2023 proved to be a challenging period for the crude oil market in Europe, with several factors impacting the prices to showcase a bearish trend. The ongoing concerns about weakening demand worldwide and booming US oil production and export strategies continued to hamper the supply/demand equilibrium, leading to market fluctuations. Additionally, attacks by Houthi militants in Yemen on merchant vessels in the Red Sea caused major shipping lines to avoid the Suez Canal, a crucial global shipping route. Despite these factors, coupled with the IEA's confirmation of slowing global oil demand, cast further shadows over the oil prices. Germany, being one of the major consumers of crude oil in the region, witnessed a moderate decline in demand due to the slowdown in its manufacturing sector. The trend for crude oil prices in Germany followed the bearish sentiments, with a decline of 1.2% in comparison to the previous quarter. The latest quarter-ending price for crude oil Brent in Germany was USD 78/ barrel.
MEA
The fourth quarter of 2023 for crude oil in the MEA region was marked by a bearish market sentiment, with low demand and high supply. The global crude oil prices were impacted by various factors, including Saudi Arabia's voluntary supply cut till year-end, Russia's potential output cuts, and the lack of full commitment to production cuts from some OPEC+ members. The escalating tensions in the Middle East also added to the downward pressure on prices, with concerns about global oil supply disruption. Saudi Arabia, being the largest oil producer in the world, had a significant impact on the market. The country continued its voluntary supply cut till year-end, which had a positive impact on the prices. However, the increased crude oil production in Nigeria Angola, and the US further added to the global supply, pressuring the prices. The trend for Saudi Arabia was bearish, with a low demand and moderate supply. The correlation price percentage for the country was -5%, indicating a decrease in prices compared to the previous year's same quarter.
