Commodities
Oil Prices Plummet as China Demand Peaks and Hormuz Disruptions Ease
Commerzbank's Carsten Fritsch notes that oil prices are continuing to fall despite severe disruptions to tanker traffic through the Strait of Hormuz. A softer-than-expected US sanctions on Iran have added to downward pressure on oil prices.
The drop in oil prices comes as China's largest refiner believes national oil demand peaked last year and crude processing may also have reached its peak, pointing to lower import requirements.
If Middle East supplies normalize, weaker Chinese demand could contribute to an oversupplied market and further downside in oil prices. Commerzbank's Carsten Fritsch expects a slight recovery in demand next year if the conflict between the US and Iran eases.