Many analysts have been expecting oil markets to tighten in the second half of 2023. That narrative failed to lift oil markets in the first half of this year, but will oil markets start to rise again? Hopes of stimulus in China and a stronger US GDP number last Thursday can potentially boost hopes of more oil demand. However, the seasonal picture would seem to contradict this outlook.

Over the last 15 years, US oil has fallen by an average of 10.88% between August 1 and December 30. The largest fall was in the Global Financial Crisis with a nearly 70% fall. However, the oil markets bucked the downward bias in 2016 and 2017 with gains of over 20% in both years.

So, is oil heading for more gains on greater demand and falling supply? Or will oil head lower in line with a period of seasonal weakness?

Major Trade Risks: Remember, that previous seasonal patterns do not necessarily play out every year and the picture for global growth is very uncertain right now.

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