Crude oil prices trended lower across most of July, and this continued into early August – with benchmark Brent crude dipping below US$80/barrel before a modest rally took it back above this mark, NAB commodity strategists note.

Supply side pressures persist

“Prices plunged once again at the end of August. Global demand trends have been mixed of late – with China’s apparent consumption of crude oil falling in the past three months (largely on weakness in the petrochemical sector), while US consumption has been unexpectedly strong, with the IEA attributing this to robust service sector activity.”

“Supply side pressures persist, with turmoil in the Middle East driving fears of disruption to oil production in the region, while uncertainty around temporary OPEC+ production cuts – set to expire in Q4 – remains.”

“Recent price trends have fallen below our previous forecasts, so we have revised our outlook lower. Brent is forecast to average US$82.7/barrel in 2024 and US$80/barrel in 2025.”