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

Amrita Sen, who leads market intelligence at Energy Aspects, told CNBC that the oil market has reached an "inflection point" and is moving into what she called an "upward spiral" between crude and refined products. She pointed to accelerated global inventory drawdowns and a rebound in Chinese buying as primary drivers pushing prices higher. Sen said China has returned to materially larger crude purchases, estimating to Bloomberg that imports are about 10 million barrels per day in the current month — roughly 3 million bpd more than in June, when flows fell to below 7 million bpd. That recovery in Chinese demand, combined with recent inventory draws, is tightening the physical balance, she added. Complicating the supply picture are intensified shipping risks around the Middle East. Sen cited tanker attacks in the Strait of Hormuz and Houthi threats in the Red Sea as factors hampering deliveries to Asian refiners. She warned that if cancellations and delays in Hormuz persist, Asian refiners may have little choice but to cut runs, reducing refinery throughput. Those dynamics have already been reflected in prices: Sen noted that 120 million barrels were pulled from inventories globally over the past two weeks, and prices jumped above $100 a barrel on Wednesday for the first time since July. Early trading on Friday showed oil was on course to finish the week above $100 for the first time since May, underscoring the market's tightening stance.