The Energy Information Administration (EIA) reported last Thursday that U.S. crude oil production hit an all-time high, even as stockpiles of crude, gasoline, and distillates saw declines. For the week ending October 11, crude inventories fell by 2.2 million barrels to a total of 420.6 million barrels, while stocks at the Cushing delivery hub in Oklahoma increased slightly by 108,000 barrels. U.S. domestic production surged by 100,000 barrels per day, reaching a record 13.5 million barrels per day—surpassing the previous record of 13.4 million barrels per day set just two months earlier.
Net U.S. crude imports dropped to a seven-month low, decreasing by 1.04 million barrels per day to 5.5 million barrels per day, while weekly exports climbed by 329,000 barrels per day to 4.12 million barrels per day. The report also noted disruptions caused by recent hurricanes, particularly Hurricane Milton, which impacted Gulf Coast refinery operations.
Oil prices climbed higher for the second consecutive day on Tuesday, as investors shifted their focus from potential ceasefire discussions in the Middle East to signs of rising demand from China.
Last Friday, oil prices plummeted, leading to a weekly loss of over 7%. This decline was primarily driven by disappointing economic growth figures from China and a mixed outlook for oil production in the Middle East. Brent crude futures closed the week down more than 7%, with WTI dropping 8%. These losses represent the steepest weekly declines since early September, coinciding with downward revisions of global oil demand forecasts by both OPEC and the International Energy Agency for 2024 and 2025.
Recent data revealed that China’s economic growth slowed in the third quarter, marking the slowest rate of expansion since early 2023. Although September saw better-than-expected consumption and industrial output, refinery production continued to decline for the sixth consecutive month due to narrow refining margins and reduced fuel consumption. In contrast, U.S. crude oil production reached new heights just a week prior, with the EIA reporting a 100,000 barrel per day increase.
On Monday, crude oil prices bounced back, rising nearly 2% as markets reacted to uncertainties surrounding Middle East conflicts, particularly anticipated Israeli actions against Iran, which heightened concerns over regional supply stability. The recent price drop can largely be attributed to long liquidation as the market tries to navigate slowing global demand amid ongoing geopolitical tensions.
Despite recent economic stimulus measures from Beijing, forecasts suggest that China’s oil demand growth will remain subdued through 2025. The International Energy Agency anticipates that as China’s economy shifts toward electric vehicles, growth will moderate. Besides, the CEO of Saudi Aramco expressed optimism about Chinese oil demand, citing strong policy support aimed at boosting economic growth and expected increases in jet fuel and petrochemical demand.
Recent monetary and fiscal initiatives from China aimed at rejuvenating its economy have led to revised oil demand projections, suggesting that any economic upturn will likely enhance fuel consumption, though a time lag may exist before the impact is felt.
In addition, China’s crude oil import dynamics are shifting, with the Ministry of Commerce announcing a quota of 257 million metric tons (around 5.14 million barrels per day) for non-state-owned enterprises for 2025, up from 243 million metric tons this year. This increase is partly driven by the recent operational commencement of Shandong Yulong Petrochemical, which requires higher crude imports to support its new refinery. The quota allocation process will be finalised by the end of 2024, with future adjustments based on specific company needs and new refining capacities, noting that companies without import records from the last two years will be ineligible for allocations.
BlackRock is in the spotlight this week. Their significant investment in Bitcoin is a noteworthy development in the market. As one of the largest asset management firms globally, their actions often reflect broader trends and confidence in specific assets. This move could signal growing institutional acceptance of cryptocurrencies, potentially encouraging more investors to see Bitcoin as a legitimate asset class.
By investing such a large sum of $332.2 million on the 22nd of October, 2024, BlackRock might believe that Bitcoin is undervalued or poised for growth, especially if they anticipate favourable regulatory developments or market conditions in the near future. In an environment of economic uncertainty, many institutions are seeking to diversify their portfolios, and Bitcoin, often referred to as ‘digital gold,’ may be viewed as a hedge against inflation or market volatility.
Moreover, BlackRock typically adopts a long-term investment strategy, which suggests they believe in Bitcoin’s potential for sustained growth over time. While it’s essential to conduct your own research, significant moves like this can serve as a catalyst for increased market interest and may indicate a shift in how traditional finance perceives cryptocurrencies. Also, there are strong indicators that Donald Trump who is pro-Bitcoin, might be the likely winner of the upcoming American presidential elections.
Furthermore, October 31 will mark 16 years since Satoshi Nakamoto, the pseudonymous creator of Bitcoin, released the cryptocurrency’s white paper to the cypherpunk mailing list. This pivotal moment laid the groundwork for the Bitcoin network, which experienced its first transaction a few months later on January 3, 2009. This date is celebrated in the community as Genesis Block Day.
Binance, the world’s largest crypto exchange, has experienced a 13% year-over-year decline in spot trading volume, with its market share dropping from 52.5% in October 2023 to 39.5% currently. This decline is mirrored in its crypto derivatives market share, which fell by 8.4% over the same period, decreasing from 50.9% in October 2023 to 42.5% in October 2024, according to a research. This might also have been influenced by Changpeng Zhao going to prison for 4 months.
Reports also note that smaller exchanges like Bybit, Bitget, and OKX have taken advantage of Binance’s declining market position. Bybit has risen from the seventh spot last year with a 3.2% market share to second place with 8.51%, more than doubling its share.
Meanwhile, OKX has moved up to become the third-largest spot exchange, slightly increasing its market share from 5.4% to 6.38%.
As of October 18, 2024, over $50 billion worth of Ether is locked in accumulation wallets, indicating a significant increase of nearly 65% since the start of the year. According to analyst Burakkesmeci from CryptoQuant, the total amount of Ethereum in these long-term holding addresses has surpassed 19 million ETH, up from around 11.5 million ETH in January.
This rise in accumulation addresses suggests a growing confidence among long-term investors regarding Ethereum’s future. With Ether currently trading at approximately $2,575, the accumulation of such a substantial amount reinforces the belief in the asset’s long-term value. Accumulation addresses, which show no prior withdrawals, serve as a key indicator for traders assessing market sentiment and potential price trends.
