Crude Oil Higher on Dollar Weakness and Stronger Chinese Demand

Core Insights - Crude oil and gasoline prices exhibited mixed performance, with WTI crude oil closing up by 0.54% while RBOB gasoline fell by 1.29% [1] - The decline in the dollar index supported crude prices, alongside increased crude demand from China, which saw a 3.1% year-on-year rise in crude imports for January to October [1] Group 1: Economic Factors - Economic concerns limited gains in crude oil prices, highlighted by a drop in US consumer sentiment to a nearly 3.5-year low and a decline in the S&P 500 to a 2-week low, impacting confidence in energy demand [2] - Saudi Arabia's decision to lower the price of its main crude grade to Asia for December delivery to the lowest level in 11 months indicates weakened energy demand, which is bearish for oil prices [3] Group 2: Supply Dynamics - OPEC+ announced an increase in production by 137,000 barrels per day (bpd) for December but plans to pause further production hikes in Q1-2026 due to an emerging global oil surplus, with a forecasted record surplus of 4.0 million bpd for 2026 [3] - OPEC's crude production rose by 50,000 bpd to 29.07 million bpd, marking the highest level in 2.5 years, while there remains 1.2 million bpd of production yet to be restored from earlier cuts [3] Group 3: Geopolitical Influences - Reduced crude exports from Russia, exacerbated by Ukrainian attacks on Russian refineries, have limited Russia's export capabilities, with total seaborne fuel shipments dropping to 1.88 million bpd, the lowest in over 3.25 years [3] - New US and EU sanctions on Russian oil companies and infrastructure have further curtailed Russian oil exports, impacting global supply dynamics [3]