Crude oil struggles on

Crude oil is a touch firmer this morning. This has lifted front-month WTI back to where it started a week ago. Overall, last week split cleanly into a positive first half which saw WTI briefly break above $70 a barrel, and a dismal second half which saw it drop back to $67. In between there was a delayed OPEC+ meeting and the ousting of Assad from Syria. The former saw the cartel extend its production cuts until April next year, as expected. This is helping to put a floor under crude prices, and should continue to do so. Front-month WTI has generally found some support around $66.50 since October, while the low of $65 has held since May 2023. At the same time, there has been a succession of lower highs since September 2023. Prices have come under continued downward pressure thanks to plentiful supply, and weakening demand. China’s economic slowdown following its property crisis must take the blame for the latter, although demand across Asia as a whole is down significantly this year. Perhaps equity investors should take more notice of lower oil prices, and consider what these prices are telling them about the economic outlook