The Times Australia
News From Asia

.

Oil market dynamics and future trends with global broker Octa

KUALA LUMPUR, MALAYSIA - Media OutReach Newswire - 21 November 2024 - As a critical resource in the global economy, oil is integral not only to the energy sector but also to industries such as transportation, manufacturing, and agriculture.

Changes in its prices impact inflation rates, production costs, and global trade. For instance, oil price increases can accelerate global inflation. This effect ripples through various sectors, with higher transportation and production costs driving up prices for goods and services worldwide. Kar Yong Ang, a financial market analyst at Octa Broker, deciphers current oil market trends, elucidating the economic and trading implications for market participants to consider.

Oil market dynamics and future trends with global broker Octa

Current state of the oil market
In 2024, the global oil market faces an intricate balance of supply and demand, with production hovering around 101.5 million barrels per day, closely mirroring daily consumption. OPEC+, primarily responding to concerns over weak demand due to slowing economic growth in major markets, recently implemented production cuts aimed at reducing volatility. Unlike previous measures driven by supply shortages, this strategic adjustment seeks to stabilise prices amid shifts in market sentiment and to offset demand uncertainties from countries like China. Furthermore, sanctions affecting Russian oil exports have introduced additional market opacity due to shadow fleet operations.

Macroeconomic activity in major oil consumers, including the U.S. and China, continues to drive global demand trends. Studies suggest a 1% global GDP rise generally correlates with an approximate 0.8% increase in oil demand, underscoring how economic performance directly influences energy consumption. In recent months, U.S. demand has shown a moderate decline due to inflation and high interest rates, which have impacted consumer spending. China’s demand has been tempered by a stabilising growth rate, signalling a softening in oil demand from Asia's largest economy.

Last autumn price peaks have given way to a more recent stabilisation, with oil prices now ranging between $70 and $75 per barrel. As of middle November 2024, Brent crude was trading around $71.97, while West Texas Intermediate (WTI) stood at $68.04 per barrel. This recent dip from the previous week reflects the market’s sensitivity to both demand forecasts and ongoing geopolitical factors.

Octa

Factors that affect the oil market
Political tensions in oil-producing regions play a significant role in shaping global oil prices. For example, recent sanctions on Russia have limited its oil export capabilities, impacting around 4 million barrels per day, or roughly 5% of global supply. Additionally, production cuts by OPEC+ have introduced further supply restrictions to stabilise prices. Such geopolitical decisions highlight the importance of political stability in the oil sector.

In the U.S., recent political shifts could lead to policy changes impacting domestic oil production. Donald Trump’s re-election signals a potential return to deregulation, favouring domestic production growth. His prior administration expanded U.S. oil output to a record high of 13 million barrels per day in 2019, and similar policies could drive further supply increases. Higher U.S. production, however, could introduce more supply into the global market, likely exerting downward pressure on prices and potentially increasing market volatility.

Technological advancements and a shift towards renewable energy are gradually reducing the reliance on traditional oil. The International Energy Agency (IEA) projects that by 2040, renewable sources could meet over 40% of global energy demand, as countries aim to cut carbon emissions in line with climate goals. Despite these shifts, oil is expected to remain essential for sectors like aviation and heavy manufacturing, although overall demand may see a decline in the coming decades.

Future prospects of the oil market
OPEC+ production decisions, global economic recovery trends, and seasonal demand patterns will likely influence short-term oil market dynamics. Seasonal heating demand during the winter months typically drives prices upward, especially in colder regions. Emerging markets, particularly in Asia, are anticipated to see steady growth in oil demand as industrial activity expands. This short-term demand increase could provide upward pressure on prices, balancing out some of the recent supply constraints.

In the long term, the oil market faces a transformative shift as renewable energy adoption accelerates. With governments worldwide investing heavily in sustainable energy infrastructure, global oil demand is projected to decline gradually over the next two decades. According to the IEA, global oil consumption could decrease by as much as 25% by 2040 as electric vehicle adoption and green technology become mainstream. This energy transition poses both challenges and opportunities for the oil sector, requiring adaptation to shifting consumer demands.

Trump’s victory could significantly influence oil market dynamics through policies that favour the oil and gas sector. His administration previously prioritised energy independence, implementing deregulation policies that boosted domestic production. A return to such policies could lead to increased U.S. output, potentially intensifying competition in the global market and affecting price stability. Additionally, shifts in foreign policy could reshape trade relations with major oil-producing nations, impacting global oil flows.

Oil remains a critical asset within the global economy, influencing inflation, production costs, and economic stability. At the same time, the asset's price is affected by geopolitical stability, OPEC decisions, technological advances, environmental policies, global supply and demand, as well as the US dollar strength since the price of oil is commonly denominated in US dollars. Traders and investors should monitor these factors to be aware of recent market trends and to be able to identify potential price movements more carefully.
Hashtag: #Octa

The issuer is solely responsible for the content of this announcement.

Octa

is an international broker that has been providing online trading services worldwide since 2011. It offers commission-free access to financial markets and various services used by clients from 180 countries who have opened more than 52 million trading accounts. To help its clients reach their investment goals, Octa offers free educational webinars, articles, and analytical tools.

The company is involved in a comprehensive network of charitable and humanitarian initiatives, including the improvement of educational infrastructure and short-notice relief projects supporting local communities.

In the APAC region, Octa received the ‘Best Trading Platform Malaysia 2024’ and the ‘Most Reliable Broker Asia 2023’ awards from Brands and Business Magazine and International Global Forex Awards, respectively.

Times Magazine

Headless CMS in Digital Twins and 3D Product Experiences

Image by freepik As the metaverse becomes more advanced and accessible, it's clear that multiple sectors will use digital twins and 3D product experiences to visualize, connect, and streamline efforts better. A digital twin is a virtual replica of ...

The Decline of Hyper-Casual: How Mid-Core Mobile Games Took Over in 2025

In recent years, the mobile gaming landscape has undergone a significant transformation, with mid-core mobile games emerging as the dominant force in app stores by 2025. This shift is underpinned by changing user habits and evolving monetization tr...

Understanding ITIL 4 and PRINCE2 Project Management Synergy

Key Highlights ITIL 4 focuses on IT service management, emphasising continual improvement and value creation through modern digital transformation approaches. PRINCE2 project management supports systematic planning and execution of projects wit...

What AI Adoption Means for the Future of Workplace Risk Management

Image by freepik As industrial operations become more complex and fast-paced, the risks faced by workers and employers alike continue to grow. Traditional safety models—reliant on manual oversight, reactive investigations, and standardised checklist...

From Beach Bops to Alpine Anthems: Your Sonos Survival Guide for a Long Weekend Escape

Alright, fellow adventurers and relaxation enthusiasts! So, you've packed your bags, charged your devices, and mentally prepared for that glorious King's Birthday long weekend. But hold on, are you really ready? Because a true long weekend warrior kn...

Effective Commercial Pest Control Solutions for a Safer Workplace

Keeping a workplace clean, safe, and free from pests is essential for maintaining productivity, protecting employee health, and upholding a company's reputation. Pests pose health risks, can cause structural damage, and can lead to serious legal an...

The Times Features

Prefab’s Second Life: Why Australia’s Backyard Boom Needs a Circular Makeover

The humble granny flat is being reimagined not just as a fix for housing shortages, but as a cornerstone of circular, factory-built architecture. But are our systems ready to s...

Melbourne’s Burglary Boom: Break-Ins Surge Nearly 25%

Victorian homeowners are being warned to act now, as rising break-ins and falling arrest rates paint a worrying picture for suburban safety. Melbourne residents are facing an ...

Exploring the Curriculum at a Modern Junior School in Melbourne

Key Highlights The curriculum at junior schools emphasises whole-person development, catering to children’s physical, emotional, and intellectual needs. It ensures early year...

Distressed by all the bad news? Here’s how to stay informed but still look after yourself

If you’re feeling like the news is particularly bad at the moment, you’re not alone. But many of us can’t look away – and don’t want to. Engaging with news can help us make ...

The Role of Your GP in Creating a Chronic Disease Management Plan That Works

Living with a long-term condition, whether that is diabetes, asthma, arthritis or heart disease, means making hundreds of small decisions every day. You plan your diet against m...

Troubleshooting Flickering Lights: A Comprehensive Guide for Homeowners

Image by rawpixel.com on Freepik Effectively addressing flickering lights in your home is more than just a matter of convenience; it's a pivotal aspect of both home safety and en...