Deflationary Pressure Worsens in China
October 14, 2024
The energy markets are selling off this morning as the Chinese government released data yesterday that shows deflationary pressures worsened in September. This bad news on China has the markets trade lower to start this week.
The energy markets continue to be impacted by two main events. The conflicting news between China being too soft on their stimulus package and the potential for the Israel and Iran conflict to get worse and impact oil production and or supply. As these events continue to develop, and the news hits the headlines the market reacts and that will continue until a clear picture emerges.
This morning OPEC released their monthly report, and it showed a revision for global demand growth in 2024 and 2025. In the report , world oil demand is expected to rise by 1.93 million barrels per day in 2024, which is down from 2.03 million bpd in last month’s report. For next year, OPEC cut its 2025 demand growth estimate to 1.64 million bpd from 1.74 million bpd. Poor Chinese economic outlook accounted for most of the drop this year.
The US said it would send missiles, defense systems, and troops to Israel increasing the tension in the Middle East. There was also a report on Friday that the US is tightening sanctions on Iran to slow the revenue it gets from oil sales.