Analysts had expected a tighter oil market in the second half of 2023. However, this scenario did not have the desired effect on the oil market in the first half of this year. The question now is whether the oil market will rise again.
There are a number of factors that could potentially fuel hopes for higher oil demand. First, there are hopes of stimulus in China, which could lead to an increase in oil consumption. Second, a stronger US GDP figure from last Thursday points to potentially stronger US oil demand.
However, the seasonal pattern contradicts this positive outlook. Over the past 15 years, oil prices in the United States have fallen an average of 10.88% between August 1st and December 30th. The sharpest drop occurred during the global financial crisis, when oil prices fell nearly 70%. While there were exceptions in 2016 and 2017, with gains of more than 20% in both years, the overall trend points to a period of seasonal weakness.
It’s important to note that the seasonal patterns above may not apply every year. Additionally, global growth prospects are extremely uncertain at this time, adding complexity to forecasting oil market trends.
To sum up, while there are some positive factors that could boost oil demand, the seasonal pattern points to a period of weakness. The future direction of oil markets remains uncertain and market participants should closely monitor global economic developments and geopolitical factors to better understand where oil prices may be headed.
