- Oil edges lower as demand concerns persist amid the resurgence of the Middle East war premium
- November ’23 WTI lost 41c this morning to trade around $85.97/Bbl
- China's economic recovery remains in focus amid declining home sales and slower-than-expected domestic consumption recovery
- However, China is considering a fiscal stimulus by issuing $137 billion in additional debt for infrastructure projects, potentially exceeding its 3% budget deficit cap for 2023
- Furthermore, the IMF revised China's growth forecast to 5% for 2023 (down by 0.2%) and to 4.2% for 2024 (down by 0.3%) (BBG)
- The bank also called for central banks to maintain tight policy until price pressures ease and raised its 2024 global inflation forecast
- Prompt month WTI rose by $3.6/Bbl yesterday following the Hamas-Israel conflict, raising geopolitical tensions despite no immediate impact on supply
- On Monday, options markets saw their biggest swing in favor of bullish calls since March of 2022, when Russia invaded Ukraine (BBG)
- Equities are up this morning, while the dollar is down ahead of this week’s CPI and PPI reports
- U.S. gears up to tighten grip on Russian oil sanction breaches (WSJ)
- With Russian crude prices reaching as high as $85/Bbl in September, Treasury Secretary Janet Yellen emphasized the US's commitment to bolstering the established $60/Bbl price cap on Russian oil sales
- The price cap mandates Western companies involved with Russian oil to trade or insure it at or below the set cap or risk penalties from the U.S. and its allies
- However, Russia's multifaceted oil export system, involving unmonitored resales at sea, complicates the enforcement of price caps