1. Newsroom
  2. The latest on the oil market
Menu
Expertise 08.10.2018

The latest on the oil market

The latest on the oil market

September saw WTI oil prices drop 4% during the first week of the month before rallying almost 12% to reach USD 75 per barrel at the beginning of October. The rally came as investors have been gauging OPEC’s ability to replace falling Iranian exports and declining Venezuelan production.


  • Oil exports from Iran had already fallen to their lowest point in two and a half years, down 260,000 barrels of crude and condensate in September, a 39% export drop since April. The decline in production was less than the fall in exports, as Iran’s output only fell 11% during the same period, reaching a two-year low of 3.3 million barrels. The declines are expected to accelerate further once sanctions officially begin on 1 November. Japan and South Korea – two major importers of the country’s crude – have already stopped buying Iranian oil and are starting to diversify their supply; India might follow suit.
  • Despite Iran’s deepening losses, OPEC production rose last month as the group’s 15 members pumped 30,000 more barrels in September than in the previous month, an increase mostly driven by Saudi Arabia, Angola and Libya. Russia, a major partner in the 2016 oil deal, has also increased production, at one point jumping as high as 11.36 million barrels a day – a post-Soviet record. The decline in Iranian crude is not just being countered by OPEC members and Russia: in the US, Donald Trump has been giving the impression that he is working with the Saudis to cap oil prices and protect Americans from high gasoline prices. The president has been discussing efforts to ensure that no supply disruption will affect the stability of the oil markets and threaten the growth of the global economy.
  • On the demand side, it remains unclear if an end to the Sino–American trade war is in sight. Trump might not de-escalate his attacks on the Chinese before the midterm elections. Reaching an agreement with China will alleviate the fears surrounding global demand from macro investors that recognise that demand growth in the next couple of years will mainly come from China and India. Demand estimates remain stable for now at an average growth rate of 1.5 million barrels per day, but these might be at risk if the effects of the trade war start to affect Chinese demand.
  • Looking at oil companies, despite the fact that Q3 results are often hit by planned maintenance and weak seasonal gas demands, we believe that energy supermajors will print strong Q3 results on the back of higher oil price realisations, posting higher-than-expected cash flows. European supermajors in general, and those exposed to WTI and Canadian crude in particular, should continue to benefit from the price differentials in these regions and could outperform their peer group.
UBP Investment Expertise

Melki_Pierre_150x150.jpg

Pierre Melki
Equity Analyst Advisory & Research

Expertise

Swiss & Global Equities

Why Swiss equities now? This market offers equity investors the stability and agility they need to navigate this volatile period. 

Read more
Expertise

European Equities

European equities offer unrivalled opportunities in terms of breadth of sector and market exposure.

Read more

Actualités les plus lues

Expertise 01.10.2020

Covid-19: Restez informés avec l'UBP

Depuis l’apparition du coronavirus, l’UBP accompagne et soutient ses clients dans le contexte inédit de cette crise sanitaire mondiale. La Banque vous informe régulièrement de l’adaptation de ses dispositifs aux règles de précaution fixées par les autorités et partage avec vous les dernières analyses de ses experts sur les conséquences de la pandémie pour l’économie mondiale et les marchés financiers.

Expertise 30.06.2020

Nouvelles perspectives d’investissement 2020 de l’UBP

L’économie globale à la croisée des chemins
Expertise 24.06.2020

Market turmoil brings new opportunities for pragmatic investors

March 2020 was difficult time for many investors, as COVID-19 spread across Europe and the US, leading to sharp sell-offs in fixed-income credit markets. While such market turbulence is not to be welcomed, its occurrence can create opportunities.


A lire également

Expertise 26.11.2020

Univers des petites capitalisations européennes: des étoiles montantes

Les petites entreprises – une formidable source d’opportunités de croissance

Expertise 24.11.2020

Des joyaux cachés parmi les SMID Caps suisses et européennes

Les sociétés de petite et moyenne capitalisation («SMID Caps») affichent traditionnellement des taux de croissance et des rendements supérieurs sur le long terme en comparaison des grandes capitalisations. Il est en effet plus facile de générer une croissance dynamique à partir d’une plus petite structure. Par ailleurs, les SMID Caps suisses et européennes offrent généralement aux investisseurs une exposition idéale aux grandes tendances de croissance séculaires.

Expertise 21.11.2020

UBP Investment Outlook 2021

Le Meilleur des Mondes