Oil Dives $4 As Demand Dims, Shale Booms And OPEC Resists Cuts
NEW YORK, Oct 14 (Reuters) - Oil dived more than $4 a barrel on Tuesday, its biggest drop in more than two years as mounting evidence of slackening demand and unrelenting U.S. shale output left traders struggling to peg a floor for crude's four-month rout.
The abrupt acceleration of an over 26 percent slide in prices since June was triggered by three news items that epitomized the market's turn: a downgrade in global oil consumption forecasts; projections for another big boost in shale oil; and reluctance by OPEC members to cut output.
Brent crude for November fell $3.85 to settle at $85.04 a barrel after a late lurch lower knocked prices to below $85 a barrel for the first time since 2010. It was the biggest one-day drop since 2011.
U.S. crude fell $3.90 a barrel to settle at $81.84, its biggest percentage fall in about two years.
Oil is struggling to find a floor after Saudi Arabia made clear that it was focused on maintaining market share, not supporting prices with unilateral production cuts.
Other members appear to be taking a similar tack. A source familiar with oil policy in Iran, normally one of the first in OPEC to call for production cuts, followed Kuwait in saying there was no need to rein in supplies.
Some oil traders are now looking for downside targets at $80 or below. On Sunday, Kuwait's oil minister said that oil prices might stop falling at around $76 or $77 a barrel. Saudi Arabia privately told oil market participants last week that it was comfortable with lower prices, possibly down to $80 Brent.
View Full Article
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.