Oil stocks go down as crude oil falls. Eni and Saipem pay the price
Tenaris was also down. The risk of escalation in the Middle East diminishes, but fears remain over Chinese demand, also affected by the faster-than-expected spread of electric vehicles
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(Il Sole 24 Ore Radiocor) - Oil stocks slipped at Piazza Affari penalised by sharp falls in crude oil prices. Eni , Saipem and Tenaris thus posted the worst performances, slipping to the bottom of the Ftse Mib. Shares of foreign companies in the sector followed the same trend: TotalEnergies in Paris and Bp in London. Dragging the sector down was, as mentioned, the trend in raw material prices, which hit two-week lows, effectively cancelling out the gains fuelled, in the previous eighth, by fears of an escalation in the Middle East. At the moment, Wti lost 2.9 per cent to $70.96 a barrel, while Brent crude dropped 2.9 per cent to $74.54.
On the one hand, investors, according to analysts at Phillip Nova, are less concerned about the supply risks of an escalation between Israel and Iran, after Benjamin Netanyahu reportedly told the US he did not want to strike Iran's oil and nuclear infrastructure, according to the Washington Post. On the other hand, fears over Chinese demand continue to weigh heavily, which even in September showed no signs of recovery. Indeed, the Dragon's crude oil imports fell to 45.5 million tonnes, or 11.1 million barrels per day: 7.4% less than in August and 0.6% less than in September 2023. This drop, reports Il Sole 24 Ore, reinforces the hypothesis that the trend is not only caused by the stalling economy, but also by structural factors, such as a faster-than-expected spread of vehicles not powered by petrol or diesel. This factor was highlighted by Opec in its monthly report in which, after much resistance, it cut its estimate of global oil demand for the next two years. The organisation now sees it growing by 1.9 million barrels per day in 2024 (about +2%) and 1.6 mbg in 2025, still very robust increases (roughly double those predicted by the IEA and most analysts), but showing how Opec's optimism is beginning to falter. "Diesel consumption continues to be dampened by the slowdown in economic activity," reports the Vienna-based organisation, "especially in construction and residential buildings, and by the replacement of oil with liquefied natural gas as a fuel for heavy vehicles.
