Oil Prices Erase Recent Gains
West Texas Intermediate (WTI) and Brent crude oil futures plunged Tuesday, erasing gains the benchmarks had largely sustained during the previous four trading days.
The August WTI lost $1.96 Tuesday to settle at $57.62 per barrel. It peaked at $60.06 and bottomed out at $57.07. On July 10, the WTI had posted a sharp gain and settled above the psychologically important $60-mark for three consecutive days. The contract faltered Monday but not to Tuesday’s degree.
September Brent futures fell $2.13 during the second trading day of the week, settling at $64.35 per barrel. Like the WTI, the Brent surged on July 10 and remained above the $66-mark through Monday.
Rigzone’s graphs of daily commodity settlement prices illustrate WTI and Brent movements since July 10.
As the remnants of Hurricane Barry continued to move inland, traders’ attention turned to more longstanding concerns about the oil market. As Bloomberg reported earlier Tuesday, bearish matters such as increasing worldwide oil inventories, waning oil demand and a slowdown in China’s economic growth contributed to the decline.
Separately, the global investment bank Jefferies in a research note described oil demand growth as “weak” and stated that it has cut its WTI and Brent price forecasts for the second half of this year. Moreover, as Rigzone has reported, the bank expressed its view that the OPEC+ alliance of oil producers needs to prolong its output cuts beyond the current March 31, 2020, deadline.
The U.S. Bureau of Safety and Environmental Enforcement (BSEE) reported that offshore operators are progressing in restoring Gulf of Mexico (GOM) oil and gas production interrupted by Barry. As of 11:30 a.m. Tuesday, BSEE estimated that 57.3 percent of GOM oil production and 51.4 percent of GOM gas production were still shut in. At the same time on Monday, BSEE’s estimated GOM shut-in figures were 69.1 percent for oil and 60.6 percent for gas.
The price of a gallon of reformulated gasoline (RBOB) also edged downward Tuesday. August RBOB settled at $1.89, reflecting a four-cent decline.
Henry Hub natural gas for August delivery lost 10 cents to end the day at nearly $2.31.
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