On the early Asian trade on Monday, oil prices inched up ahead of the launch of China’s gross domestic product (GDP) reading, which is expected to show positivity.
By 00.18 GMT, Brent crude oil futures for December edged up by 4 cents to USD42.97/barrel while the US WTI crude rose by 2 cents to USD40.90/barrel, a day before the expiration day of the November contract.
On 02.00 GMT Monday, China will launch its third-quarter GDP data. Economists estimated the growth to be at 5.2% year-on-year as consumers regained strength and key trading partners reopened for business.
Nevertheless, the expectation of China’s slowdown in oil buying for the fourth quarter still shadows the outlook, amid high inventories and limited import quotas for independent refiners.
Weighing down the outlook was also last week’s Joint Technical Committee (JTC) discussion of the Organization of the Petroleum Exporting Countries and non-member oil producer allies (OPEC+) which estimated a gloomier oil market outlook compared to a month ago.
According to a confidential document seen by Reuters, the JTC foresaw the prolonged second wave of the coronavirus pandemic and a soaring addition from Libyan oil output to drive the oil market into surplus next year in its worst-case scenario.
This possibility could threaten OPEC+’s plan to ease record oil output cuts by adding 2 million bpd into the market starting in January.
On a side note, US House Speaker Nancy Pelosi signaled a positivity in the coronavirus relief deal before Election Day despite the persistent differences with President Donald Trump’s administration.
