In the oil market, market focus has shifted to the demand side. China’s disappointing economic growth is expected to dampen demand for oil and oil products. Economic growth in China has stabilised at around 5%, suggesting that oil imports have ‘decoupled’ from the linear growth path. Without the Chinese government’s order to increase strategic oil reserves, the impact on oil prices would have been even more significant. Nevertheless, the price drop has prompted OPEC+ to delay the phasing out of production cuts until December.
Furthermore, this Market Update analyses the global LNG market. The TTF/JKM spread is an indicator of how attractive the European market is compared to the Asian one. Last summer, this spread diverged further, with gas demand in Asia higher due to a heat wave. This is also reflected in Russian exports, where LNG has increasingly had Asia as its final destination in recent months. Finally, supply risks and constraints in the gas market are mentioned, including maintenance in Norway, the US elections and the approaching hurricane in the Gulf of Mexico.