Crude Oil Down Four Percent
Front-month crude oil futures each lost more than 4 percent Tuesday.
The December West Texas Intermediate (WTI) crude oil futures price fell $2.93 Tuesday to settle at $66.43 a barrel. The intraday range for the WTI spanned from a high of $69.66 down to $65.74.
Brent crude oil for December delivery declined to a greater extent Tuesday, losing $3.39 to settle at $76.44 a barrel.
Delia Morris, Houston-based commodity pricing analyst, attributes the down day to traders’ concerns that the market appears oversupplied amid slackening demand.
“Oil prices fell sharply in intraday trading following the announcement from Saudi Energy Minister Khalid Al-Falih that the Kingdom would look to increase its current crude output from around 10.7 million barrels per day (MMbpd) to up to 11 MMbpd,” said Morris. “Earlier in the month, oil prices had hit multi-year highs off fears that the market was poised for a severe under-supply situation once U.S. sanctions on Iran would take effect Nov. 4.”
Saudi Arabia’s pledge to raise oil production appears to be designed to allay other fears, Morris noted.
“The announcement from Saudi Arabia – apparently, in a move to be seen as a stabilizing force in global markets – comes in contrast to more pugnacious rhetoric, which had pointed toward a possible production pullback, following the murder of Saudi journalist (Jamal) Khashoggi,” said Morris.
Like crude oil, reformulated gasoline (RBOB) ended the day lower. The November RBOB contract price settled at $1.84 Tuesday, translating into a 7-cent drop.
The November Henry Hub natural gas contract price bucked the trend among the benchmarks that Rigzone tracks. Gas futures posted a 7-cent gain to end the day at $3.21.
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Senior Editor | Rigzone