Crude Oil Bears Reign
There was plenty of bearish sentiment in crude oil markets Thursday.
West Texas Intermediate (WTI) crude oil for February delivery fell $2.29 Thursday, settling at $45.88 a barrel. The WTI traded within a range from $45.67 to $47.51.
The February Brent crude oil contract also ended the day lower, losing $2.89 to settle at $54.35 a barrel.
“The brief pause in the decline in crude oil prices is over, as investors are becoming increasingly nervous over political and economic news,” Robert Rapier, chief energy analyst with Investing Daily, told Rigzone. “OPEC had temporarily arrested the decline with an aggressive announcement about production cuts, but news that the government shutdown may happen, and the fact that the Fed is raising interest rates again, have investors nervous about the demand implications.”
On a more bullish front, OPEC is focused on convincing the oil market that it will take the steps necessary to balance it, said Rapier.
“Saudi Arabia has now announced deeper cuts than the 250,000 barrels a day announced at the recent OPEC meeting earlier this month,” Rapier said. “Also bullish is this week’s Energy Information Administration report that domestic crude supplies fell by another 500,000 barrels – the third straight weekly decline.”
Nevertheless, Rapier pointed out that fear is currently driving the oil market.
“I think that’s going to be the case until it is clear that the OPEC moves are removing excess supply from the market,” he said.
Reformulated gasoline (RBOB) also edged downward Thursday. The January RBOB contract price settled at $1.32 a gallon, translating into a six-cent decline.
The performance of January Henry Hub natural gas futures failed to inject a positive note among the four energy price benchmarks that Rigzone tracks. Natural gas fell 14 cents to end the day at $3.58.
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