1. Newsroom
  2. The latest on the oil market
Menu
Analisi 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

Analisi

Gestione discrezionale – le redini sono in mano vostra

Ogni cliente ha aspirazioni e obiettivi unici, così come è unico il nostro approccio alla gestione di portafoglio discrezionale.

Leggete di più
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

Le news più lette

Analisi 10.02.2021

COVID-19: UBP vi terrà aggiornati

Dalla comparsa del coronavirus, UBP accompagna e sostiene i suoi clienti nel contesto inedito di questa crisi sanitaria mondiale. La Banca vi aggiorna regolarmente sull’adeguamento dei suoi piani alle regole precauzionali fissate dalle autorità e condivide con voi le più aggiornate analisi dei suoi esperti sulle conseguenze della pandemia per l’economia mondiale e i mercati finanziari.

Analisi 24.11.2020

Hidden gems in Swiss & European small caps

Small and mid caps have traditionally recorded higher growth rates and investment returns over the long term than large caps: it is easier to generate a dynamic growth rate from a smaller base. Swiss and European small and medium-sized capitalisations – so-called ‘SMID caps’ – also tend to provide investors with ‘pure play’ exposure to major secular growth trends.

Analisi 17.12.2020

UBP Investment Outlook 2021

Il mondo nuovo

Altro da leggere

Analisi 04.03.2021

Benefiting from trends in thematic investing

At UBP, thematic investing means devising investment strategies that benefit from megatrends, such as the disruptive forces that are reshaping our economy and our society.

Analisi 03.03.2021

Investing amidst a tantrum in US Bond Markets

US 10-year Treasury yields have risen 110 bps from their July, 2020 lows and 60 bps alone in 2021. Using previous bond market ‘tantrums’ going back to 2008 as a reference, a rise to as much as 1.7-2.5% may still lie ahead should the turmoil resume.

Analisi 01.03.2021

Gestione discrezionale – le redini sono in mano vostra

Ogni cliente ha aspirazioni e obiettivi unici, così come è unico il nostro approccio alla gestione di portafoglio discrezionale.