The price of Brent crude hit a 14-month low on Thursday, as soft data from China compounded a weak month for the commodity. However, market analysts now believe that oil could find a floor and expect prices to stabilize in the near future.
Brent futures fell below $102 on Thursday morning to trade at $101.91 per barrel by 9:00 a.m. London time. Meanwhile, U.S. crude is trading near its lowest level since January at $93.21 a barrel. Brent had spiked to $114 a barrel back in June with geopolitical tensions sending its price higher, but reports of a glut in global supplies helped it to ease lower in recent weeks.
And that weakness looks set to be over, according to several analysts. Michael Wittner, the global head of oil research at Societe Generale says that factors such as diminishing supply in Nigeria will help set a price floor for Brent at $100-102.
"Choppy price action in recent days suggests to us that the crude markets may be starting to stabilize, and that a floor may be starting to take shape," he said in a research note on Thursday morning. However, he warned that a full recovery or rebound would take a bit longer. Autumn is traditionally weak for oil markets after the summer driving season and planned refinery maintenance and Wittner believes that this will hinder any potential rally for U.S. crude, in particular.