Oil Prices Reach Inflection Point as China Crude Purchases Soar

Oil prices are poised for further increases due to accelerated global inventory drawdowns and China's significant crude oil purchases, according to Energy Aspects founder Amrita Sen.

The Strait of Hormuz tanker attacks and Houthi threats in the Red Sea have hampered crude oil supply to Asian refiners, prompting concerns that if Hormuz cancellations and delays persist, Asian refiners may be forced to reduce runs.

Sen noted that the oil market has reached an 'inflection point' and is heading for an 'upward spiral' between crude and products. The return of China's significant crude buying, with estimates suggesting 10 million barrels per day in September, compared to just under 7 million bpd in June, is also driving up prices.

The global inventory drawdowns have accelerated, with 120 million barrels drawn down over the past two weeks alone. This has led Sen to predict a 'significant leg higher' for oil prices, which have already broken above $100 per barrel for the first time since July.