Energy Aspects: Oil Market Has Reached an "Inflection Point"

Crude oil prices are expected to continue rising, with the market moving towards a new upward trend, according to Amrita Sen, founder and market intelligence director of Energy Aspects. Sen stated that global inventory drawdowns have accelerated and China has resumed purchasing crude oil at significantly higher volumes compared to the spring.

The increased shipping risks in the Middle East, including tanker attacks in the Strait of Hormuz and the threat from the Houthi group in the Red Sea, are affecting crude oil supply to Asian refiners. If the disruptions in the Strait of Hormuz persist, Asian refiners may be forced to cut back on their operations. Sen predicts that the oil market has reached an "inflection point" and is on track for an "upward spiral" between crude and products.

Earlier this week, she told Bloomberg that China is expected to import approximately 10 million barrels per day of crude oil this month, which is about 3 million barrels per day higher than in June, when China's crude oil imports fell to a ten-year low. The return of China's crude oil purchases and the accelerating inventory drawdowns are contributing to the upward price movement.

In the past two weeks alone, global inventories have seen a total of 120 million barrels drawn down. These factors are driving crude oil prices toward a "significant leg higher," according to Sen, who noted that oil prices had the potential to end the trading week above $100 per barrel for the first time since May.