Price Performance Indicators

• Week (4/12 - 8/12) ICDX crude oil prices decreased 2.77 percent.
• Ban on exports of Russian oil derivatives already off.

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Market Review

The ICDX oil contract price closed lower at $71.29 per barrel for the week ended December 8 due to China's proactive fiscal policy starting in 2025. Increased production by Russia and Libya added to oil prices this week.

ICDX oil prices experienced a decline due to China implementing a proactive fiscal policy in 2025 as part of efforts to restore economic conditions affected by the COVID-19 pandemic and property crisis. The real impact of this move was seen in the significant decline in China's crude oil imports, which recorded a decline of 13.3% in November compared to the previous month. This figure even shows a decline of 9% when compared to the same period in the previous year. The decline in oil imports from China is one of the main factors contributing to the decline in oil prices globally, considering China's position as the world's largest importer of crude oil.

Meanwhile, in November, Russia experienced a significant increase in seaborne exports following the lifting of the ban on the export of oil derivative products on December 4. This increase positively influenced production, especially in the diesel and gas oil export sector which was recorded at 8.5% compared to the previous month, reaching a total of 2.8 million tons. Although this goes against the voluntary cut plan proposed by OPEC at its November meeting, Russia continues to exploit its export potential as a strategy to support economic growth.

On the other hand, the Libya National Oil Corporation (NOC), as a member of OPEC, announced the ambition to increase its oil production to 2 million barrels per day in the next few years. This decision, however, contradicts OPEC's move to cut oil production in order to maintain market balance and oil prices. Libya's NOC decision raises concerns about increasing global oil stocks and has the potential to weaken pressure on oil prices on world markets.

Market View

China Manufacturing Purchasing Index

The latest data released by Caixin China (5/12) reflects a positive increase in the manufacturing purchasing index, which rose to 50.7 compared to the previous period. This figure shows expansive development in the manufacturing sector, an indicator of positive economic growth.

OPEC's Further Commitment to Production Cuts

Meanwhile, Saudi Arabia and Russia have begun voluntary efforts to reduce oil production by 1.3 million barrels per day. Then, with the addition of 6 other OPEC members, production reductions will reach 2.2 million barrels per day in the first quarter of 2024. This action shows the seriousness of OPEC members in supporting oil market stability through reducing production.

WEEKLY ECONOMIC DATA & EVENTS CALENDAR

Source: ICDX Research