### Summary
Oil prices rose in Asian trade, unfazed by China's disappointing interest rate cut, as the prospect of tighter supplies supported the outlook.
### Facts
- 💰 Oil prices rose in Asian trade, shrugging off China's interest rate cut.
- 🛢️ Concerns over slowing demand in China and rising US interest rates had driven steep losses in crude prices.
- 📉 China cut its one-year loan prime rate by 10 basis points to 3.45%, disappointing market forecasts for a larger cut.
- 🏢 Lack of changes in the mortgage rate raised concerns over a worsening real estate crisis in China.
- 🌍 Deep production cuts from Saudi Arabia and Russia are expected to limit crude supplies by nearly 70 million barrels over 45 days.
- 🇺🇸 Robust fuel consumption in the US, particularly during the summer season, pointed to tighter markets.
- 📈 Analysts expect oil prices to remain relatively higher for the rest of the year, despite the prospect of higher interest rates affecting US demand.
The natural gas market remains stagnant, with little activity and a soft demand, however, there is potential for growth if it breaks above the $3.00 level.
The Energy Information Administration reported a smaller-than-expected increase in natural gas inventories, boosting futures prices.
Oil prices increase as China takes steps to support its economy, but concerns about global growth, US interest rate hikes, and Chinese manufacturing data persist.
China's commodities sector, including coal mining and metals production, is experiencing declining profits due to the worsening property crisis and economic slowdown, with steel producers being the hardest hit. However, there is potential for growth in metals firms linked to the energy transition, particularly in China's green copper consumption driven by electric vehicles and renewable power.
The LPG tanker market is projected to grow by USD 61.19 million from 2022 to 2027, driven by the increase in natural gas supply.
The global offshore wind industry experienced its second-best year ever in 2022, adding 8.8 GW of clean energy online and bringing the total offshore wind capacity to 64.3 GW globally, according to the Global Wind Energy Council (GWEC). China is expected to remain the leading market for offshore wind growth in 2023, and an estimated 380 GW of new offshore wind capacity is projected to be built by 2032, with the Asia-Pacific region accounting for nearly half of it. However, challenges such as supply chain bottlenecks and regulatory delays need to be addressed for the industry to reach its full potential.
Forecasters have decreased their growth expectations for China due to deflation, rising youth unemployment, and a property-market crisis, with GDP predicted to rise by only 5.1% in 2023 and 4.5% in 2024.
China's imports of thermal coal are expected to increase in August as seaborne prices remain competitive and domestic supplies are constrained, with robust demand for imported coal driven by increased thermal power generation and declining hydropower generation.
U.S. natural gas production reached a new high in 2022, surpassing Russia and Iran, while consumption increased due to a shift away from coal and growth in renewable energy.
Saudi Arabia is set to increase its crude supplies to China as new refining capacity lifts offtake, aiming to regain lost market share in the country. Meanwhile, China's huge zinc imports have revived hopes for economic growth in the second half of 2023.
The global hydraulic equipment market is expected to grow by USD 16.28 billion between 2021 and 2026, driven by the growth of the construction sector and investments in infrastructural development.
China's economy is expected to grow less than previously anticipated due to struggles in the property market, leading economists to predict further downgrades and posing risks to both the domestic and global economy.
Demand for coal, natural gas, and oil is expected to peak in the near future, even without new climate policies, as a result of the shift towards renewable energy and electric vehicles, according to the International Energy Agency.
China's economy is still expected to grow 5% this year, despite outsized expectations and challenges such as a bloated property sector and demographic issues.
The increase in domestic natural gas prices is expected to impact consumers as gas distribution companies are likely to raise prices of CNG and PNG.
The price of domestic natural gas in India has been increased from $8.60/mmBtu to $9.20/mmBtu for the month of October, which may result in increased prices of CNG and PNG for consumers.
China's demand for major commodities such as copper, iron ore, and oil is exceeding expectations due to growth in the green economy and manufacturing sector, according to Goldman Sachs.
Southeast Asian countries, particularly Vietnam, Thailand, and Indonesia, are expected to drive demand for liquefied natural gas (LNG) by 2030, with Vietnam experiencing strong growth due to its Power Development Plan 8 and economic expansion. By 2033, Southeast Asia's LNG demand is projected to quadruple, making up 12% of the global market.
China's economic growth this year may be as low as 2 percent, half of what the International Monetary Fund predicts, due to problems in the property sector, weak foreign direct investment, and other structural issues, according to Daniel Rosen of the Rhodium Group. The IMF has forecasted 5.2 percent growth for China, but Rosen believes growth above 3 percent is unlikely in the medium term. Additionally, concerns are rising that China's economic challenges could hinder global growth.
The Chinese economy is predicted to grow about 5.7 percent in the fourth quarter, surpassing the 5 percent annual growth target, driven by unleashed services consumption potential, accelerated infrastructure investment, and growth in high-tech and private manufacturing investment, according to the BOC Research Institute.
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