Energy Demand Concerns Undercut Crude Prices

Core Insights - Crude oil and gasoline prices are under pressure due to concerns over energy demand, influenced by weaker-than-expected US housing starts and building permits [1][2] - Ukrainian attacks on Russian oil infrastructure are tightening global oil supplies, which could support crude prices [3] - Ongoing geopolitical tensions and potential sanctions on Russian energy exports are contributing to market volatility [4] Group 1: Energy Demand Concerns - October WTI crude oil closed down -0.47 (-0.73%), while October RBOB gasoline closed down -0.0129 (-0.63%) [1] - August US housing starts fell -8.5% month-over-month to 1.307 million, below expectations of 1.365 million [2] - August building permits unexpectedly fell -3.7% month-over-month to a 5.25-year low of 1.312 million, weaker than the anticipated increase to 1.370 million [2] Group 2: Geopolitical Factors - Ukraine has intensified attacks on Russian refineries, which is bullish for crude prices as it limits Russian crude exports [3] - Damage to the Kirishi refinery has halted crude processing, impacting Russia's ability to export oil [3] - Ukrainian drone attacks have reduced Russian crude-processing runs to 4.98 million barrels per day, the lowest in over 3.25 years [3] Group 3: Sanctions and Regulatory Environment - Concerns about additional sanctions on Russian energy exports are supporting crude prices [4] - President Trump has indicated a potential for new economic sanctions against Russia due to the ongoing war in Ukraine [4] - The US has proposed imposing tariffs as high as 100% on China and India for their purchases of Russian oil to pressure Russia [4]