Oil prices have fallen in the last month, but are they set to rise?
ASX 200 shares impacted by the oil price include Santos Ltd (STO), Woodside Energy Group Ltd (ASX: WDS) and Beach Energy Ltd (ASX: BPT)
Let's take a look at the outlook for the oil price.
What's ahead?
Brent crude oil has slid 11% in the past month, while crude oil has tumbled 12.25%, trading economics data shows.
The oil price fell overnight on Tuesday amid "weaker than expected" industrial output in China. Crude oil is down 0.81% at the time of writing, while WTI crude oil is sliding 0.92%.
However, an 18.9% boost in China oil refinery throughput in April has kept the floor under gold prices, according to a Reuters report.
Commenting on this trend, Price Futures Group analyst Phil Flynn told the publication:
There has been a lot of concern about China's industrial numbers, but if you look at their actual demand numbers or refinery runs, they're knocking on the door of breaking records.
Meanwhile, the International Energy Agency (IEA) has lifted the global demand outlook for oil. In a research note today, ANZ senior economist Adelaide Timbrell said:
It highlighted strong Chinese demand, which it says could grow by 2.2mb/d, about 200kb/d
more than it previously forecast. It also expects inventories will deplete by 2mb/d in the second half of the year.Meanwhile, the US has solicited bids for as much as 3mbbls of sour crude for its Strategic
Petroleum Reserve. Deliveries are planned for August.Pressure is also building on EU member states to take measures against Russian oil
flowing into Europe via India.
Commenting on the demand outlook in a recent report, ANZ commodity strategists Soni Kumari and Daniel Hynes said, "We believe the focus will shift to the tightening oil supply".
We expect jet fuel to be the catalyst for the next leg up in growth.
We still expect overall demand to grow by 2mb/d, keeping the market under-supplied through this year. Therefore, we expect prices to bottom-out soon.
Share price snapshot
The Woodside share price has returned 9% in the last 12 months.
Santos shares have declined about 13% in the past 52 weeks.
