Crude palm oil futures edge lower on subdued demand

Besides, higher supplies from the major producing areas and weak trend at overseas market weighed on crude palm oil prices.

“We are still not out of the woods despite the hike in oil prices”.

Conversely, every global recession in the past 50 years has been preceded by a sharp increase in oil prices.

Oil is holding losses after a slide this month below $40 a barrel, the lowest since February 2009, on concern slowing demand in the US and China will leave the global market oversupplied.

Brent crude futures for October delivery slipped more than $1, or 2 percent, before recovering although that still put the benchmark on track for its fourth straight monthly decline, having risen in only two of the past 14 months.

At present, though oil demand is strong, there are deep uncertainties about future economic growth, particularly in China.

So, Bloomberg bring the next course for today: WTI – $44.47 (-$0.75 or -1.66%), Brent – $49.06 (-$0.99 or -1.98%).

But if growth is likely to accelerate next year in oil-consuming economies such as China, what explains plunging oil prices?

Some traders on Monday said oil prices got a lift from a commentary in the Opec Bulletin publication suggesting the group is more willing to talk to non-Opec producers about curbing output, even though it was broadly in line with previous comments. Indicatively, in the fall of 2008, when the market was experiencing a previous price fall, the cartel held extraordinary meetings twice and both times took a decision on its output cuts, including by unprecedented 4.2 million barrels a day in December 2008.

Russia’s deputy prime minister Arkady Dvorkovich said low prices have caused reduction in investment and could soon lead to decline in output. “It is absolutely useless to expect OPEC states to cut quotas on their own”, said Fares Kilzie, head of Creon Energy, a Russian advisory firm.

In this newly competitive environment, oil will trade like any normal commodity, with the Saudi monopoly broken and North American production costs setting a long-term price ceiling of around $50 a barrel, for reasons I set out in January.

“The surplus of oil output is too great amid falling consumption and the emergence of alternative sources of energy”. On the contrary, with so numerous world’s most productive oil regions gripped by political chaos, any sign of stabilization can quickly boost supplies.