Brent Prices May Be On The Rebound
Brent crude oil was steady above $86 on Wednesday as investors saw the potential for global demand to pick up rising. The commodity traded at $86.31 at 8:00 GMT, still buoyant from China's demand figures, out on Tuesday.
Although China's third quarter GPD disappointed on Tuesday, the nation's implied oil demand helped offset worries about the Chinese economy and boosted Brent prices. The world’s second-largest oil consumer's implied oil demand rose 6.2 percent from August to September, bringing the figure to a seven-month high.
The Chinese data coupled with U.S. refinery maintenance expected in the next few months has analysts looking at Brent prices with a bullish lens. CNBC reported that some firms are forecasting Brent prices to be as high as $105 in 2015 due to rising consumption in the United States and Asia.
Related Link: Talking About Support? Barrick Gold Has Found It
Meanwhile, OPEC remains divided over whether or not to cut supplies in order to boost prices. Some of the cartel's members are willing avoid a production cut at its November meeting and accept low prices for an extended period in order to gain market share. Others are concerned about their budgets as many of the organization's members need prices above $100 in order to meet budgetary requirements.
With oil prices low and sanctions against the nation's exports dragging on the economy, Iran is struggling to meet its current budget targets. The nation has begun accusing the West of working together with other oil producing nations to reduce oil prices in order to put further pressure on the nation's economy. Iran is still working with Western officials to come to an agreement about Tehran's nuclear development program in exchange for fewer sanctions.
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.