According to the latest monthly OPEC report, the recent drop in oil prices was caused not by changes in the main economic indicators, but by speculative actions. The report highlights the resilience and stability of the global oil market, which continues to follow global growth trends. The latest data shows that the US economy continues to grow very strongly, and the IMF recently raised China's economic growth forecast for 2023 to 5.4%. The report also notes that despite current concerns about oil demand in China, fresh data indicate an increase in oil imports to the country to 11.4 million barrels per day in October. Such dynamics puts China on the path to setting a new annual record. OPEC experts also emphasize that oil imports in India will reach a record level this year due to growth in the fourth quarter. However, despite these favorable market trends, oil prices have recently shown a significant decline – largely due to the actions of speculators in financial markets. They significantly reduced their net long positions on WTI crude oil in October compared to the previous month. This led to increased volatility in the market and contributed to lower prices," OPEC said in its report. OPEC analysts also point to a significant decline in investment positions in the oil sector by hedge funds and other major players in the financial market. In October, sales of futures and options for WTI and Brent crude oil totaling 161 and 43 million barrels, respectively, were recorded. This led to a decrease in the total volume of bullish positions on the market by 37%, which significantly increased volatility and provoked a drop in prices. In addition, in October there was a significant sale of speculative positions on petroleum products, especially diesel fuel on the European ICE exchange, where net long positions on gas oil fell by 28 million barrels since the end of September. Nevertheless, OPEC is confident that such dynamics do not reflect the real state of the oil market, the stability of which is ensured thanks to the strategic and prudent approach of the OPEC+ countries. They emphasize their readiness to continue making efforts to stabilize and long-term management of the oil market in accordance with the decisions taken.
