Uncertainty has returned to the oil market this week, with the recent oil price rally having stalled due to renewed economic concerns in China and a large inventory build in the U.S., OilPrice said. 

Backwardation in Brent and WTI futures continued to widen this week as physical tightness was felt across all continents, but China’s uncertain outlook and a large US inventory build have capped oil prices. As of Friday morning, ICE Brent was trading at $86.44 per barrel and WTI below $83 per barrel. International organizations have been trying to influence the market sentiment, with OPEC raising its 2024 demand forecast whilst the IEA lowered it by 150,000 b/d, but the result (for now) is stagnation in prices.

OPEC sees what it wants to see.OPEC reiterated its upbeat oil demand outlook for 2024, expecting global crude consumption to rise by 2.25 million b/d in 2024, compared with growth of 2.44 million b/d this year, concurrently hiking this year’s GDP growth forecast to 2.7% from 2.6%. 

Iran eyes oil production ramp-up. Buoyed by soaring crude exports to China, Iran’s oil company NIOC pledged to increase oil production by 250,000 b/d to reach 3.5 million b/d by the end of September, the highest production rate since US sanctions were re-introduced on Tehran in November 2018. 

US-Iran prisoner deal to free up billions of frozen revenue.According to media reports, the United States and Iran will carry out a prisoner swap, to be complemented by the White House’s release of $6 billion of Iranian oil revenues currently frozen in South Korean accounts to a bank in Qatar.