Crude oil prices fell by another 3.6%, but vegetable oil prices barely reacted to this
Yesterday, oil prices fell another 3.6% to a 16-month low, having already lost 11.3% in September on expectations of a decline in global energy demand and news of a slight increase in imports from China.
Morgan Stanley also lowered (for the second time in two weeks) its forecast for Brent crude oil prices in the 4th quarter from $80 to $75 per barrel, which increased pressure on quotations.
News from China was mixed for energy demand and crude oil prices. On the one hand, the country increased imports by 0.5% (y/y) in August, while expectations were for a 2.5% increase. On the other hand, exports grew by 8.7% (y/y) during this time, while expectations were for a 6.6% increase, the largest increase in 17 months.
November futures for Brent crude oil fell by 3.6% to a 16-month low of $69.2 per barrel yesterday (-6.8% for the week, -17% for the month), and for US WTI crude oil – by 4.4% to $65.1 per barrel (-6.8%, -18.3%).
Oil prices barely reacted to tropical storm Francine, which strengthened to hurricane strength in the Gulf of Mexico, which could shut down operations in the region, which is home to 48% of the US refining and 20% of the US oil production capacity.
The sharp speculative decline in crude oil prices had little impact on vegetable oil prices, as traders expect oil prices to recover in the near future.
October futures for palm oil on the Bursa exchange in Malaysia for the week fell by 1.2% to 3885 ringgit/t or 885 $/t.
December futures for soybean oil in Chicago for the week fell by 3.5% to 872 $/t (-2.3% for the month).
According to Trading Economics, the average price of soybean oil for delivery to buyers for the week increased by 1% to 945 $/t amid declining supply from Ukraine and Russia.
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