Oil prices experienced volatility following an assassination attempt on Republican presidential contender Donald Trump and the commencement of China’s Third Plenum. Brent crude hovered around $85 a barrel, while West Texas Intermediate (WTI) remained above $82. The attack on Trump injected further uncertainty into the U.S. election, with the dollar edging higher, making dollar-priced commodities like oil more expensive for global buyers.
Despite the fluctuations, oil prices have seen significant gains this year, bolstered by OPEC+ output cuts and increased fuel demand during the Northern Hemisphere summer. The Chinese Communist Party’s Third Plenum, which sets broad economic and political priorities, is being closely monitored for insights into the growth trajectory of China, the world’s largest crude importer.
China’s demand for raw materials, including crude oil, has declined in the first half of the year, raising concerns about global demand. The country’s GDP growth fell to its lowest pace in five quarters, prompting the International Energy Agency to predict that China’s slowdown would likely dampen global oil consumption growth.
“The stronger US dollar, following the attempted assassination of former President Donald Trump over the weekend, is weighing on oil prices,” said Warren Patterson, head of commodities strategy at ING Groep NV. “Additionally, the market is adjusting to the idea that Chinese oil demand might disappoint this year.”
However, near-term demand signals remain robust. The timespread between Brent’s two nearest contracts stayed in a bullish, backwardated structure, with the nearest contract at a premium over the later-dated one. This gap, at 95 cents a barrel, is nearly double what it was a month ago.
