Crude Oil Has Another Down Day
West Texas Intermediate (WTI) crude oil for December delivery lost nearly 2 percent Thursday, falling $1.00 to settle at $60.67 a barrel (bbl). The WTI did manage to clear the $62 mark, reaching an intraday high of $62.42, but Thursday’s settlement price was much closer to the $60.42 intraday low.
The January Brent contract price settled at $70.65 a barrel, translating into a $1.42 decline for the day.
Traders on Thursday digested the weekly U.S. crude oil inventories report from the Energy Information Administration (EIA). On Wednesday, EIA stated that crude stocks rose to 431.8 million barrels (bbl) for the week ending November 2, translating into a 5.8 million-bbl build for the week.
On Wednesday, EIA also revealed that it has lowered its predictions for the average WTI and Brent prices for next year by 7 percent and 4 percent, respectively. EIA stated that it expects the WTI to average $65 per bbl in 2019; previously, it had projected a $70 average for the benchmark. For the Brent, EIA anticipates a $72-per-bbl average, down $3 from its earlier forecast.
EIA reported that it attributes the price forecast adjustments in part to higher-than-expected U.S. crude oil production during the second half of 2018 and in 2019. It now anticipates that domestic crude output for 2018 will average 10.9 million bpd – up 160,000 bpd from its earlier projection. Moreover, EIA increased its 2019 average daily production forecast by 300,000 bpd to 12.1 million bpd.
“The increased U.S. crude oil production is expected to contribute to global crude oil inventory growth and put downward pressure on crude oil prices,” EIA stated.
December reformulated gasoline (RBOB) posted a slight loss Thursday, declining less than a penny to settle at $1.64 a gallon.
Front-month Henry Hub natural gas futures also ended the day lower, falling approximately one cent to $3.54.
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