Following the drone strike on Saudi oil fields by Houthis on 14 September, Brent crude spiked some 15 percent to over $66 per barrel, the largest one-day increase ever recorded.
As we go to press on 15 October, Brent crude is around $59 a barrel. With supply continuing to outpace demand and despite having cut oil production 1.02 million barrels a day – blaming trade wars, Brexit, and recession fears – OPEC pledged to further reign in oil production when they next meet on 5 December.
Because of sanctions Washington imposed on Iran and Venezuela, plus the drone attacks on Saudi oil, the U.S. set a new record the week of 7 October by providing Europe some 1.8 million barrels of oil a day.
Yet, despite the slowdown in oil demand, shipping costs have reached an 11-year high, a result of American “blacklisting” of Chinese supertank operator, Cosco, accused of illicitly shipping Iranian crude.
TREND FORECAST: Unless major war breaks out in the Middle East, oil supply will still exceed demand as the global economies continue to retract.