Overview: Opec Cuts Create Price Floor, China’s Woes Limit Upside

For more than two months now, Brent has traded in a $71-$81 price band. Multiple Opec cuts have secured a floor. The voluntary, open-ended 1 million barrels per day supply cut from Saudi Arabia starting July proved vital after initial attempts failed to support $90 and then $80. Now that Opec has taken control of supply, the focus moves to oil demand — and the residual worries over the global economic and financial situation. Central in that debate is the health of the Chinese economy, since China is supposed to deliver half the demand growth in 2023. The country’s consumers are driving and flying more after Covid-19 restrictions were lifted, but the industry sputters. And that can have a global impact.