Oil Drops After Biggest Gain in a Month
(Bloomberg) -- Oil slid after surging the most in almost a month on Friday amid doubts that recent progress in the U.S.-China trade talks will compensate for a worsening global demand outlook.
Futures in New York fell as much as 1.4% after gaining 2.2% in the previous session. Washington and Beijing made several concessions to reach a partial trade deal last week, and are aiming for a more comprehensive agreement before the end of the year. Prices gained on Friday as an attack on an Iranian crude tanker in the Red Sea stoked tension in the Middle East.
Despite positive momentum in the trade negotiations, and an array of threats to oil supply in recent months including an attack on Saudi Arabia’s oil facilities, unrest in Iraq and Ecuador and the economic unraveling of Venezuela, traders continue to fret that faltering consumption and robust U.S. crude production will lead to a global surplus next year. Hedge fund bets that West Texas Intermediate futures will decline have more than doubled in the last three weeks.
“The oil market verdict continues to be bearish, both for the nearest months and for next year,” said Bjarne Schieldrop, Oslo-based chief commodities analyst at SEB AB. “The concerns over the attacks on the Iranian oil tanker last week are evaporating and the optimism over the U.S.-China trade deal is fading.”
WTI for November delivery dropped 50 cents, or 0.9%, to $54.19 a barrel on the New York Mercantile Exchange as of 10:19 a.m. in London. It advanced $1.15 on Friday, the most since Sept. 16, capping a weekly gain of 3.6%.
Brent crude for December settlement fell 58 cents, or 1%, to $59.93 a barrel on the ICE Futures Europe Exchange after climbing 2.4% on Friday. The global benchmark traded at a premium of $5.65 to WTI for the same month.
“Macro sentiment will be decisive for the oil price in the very short term,” said Helge Andre Martinsen, senior oil market analyst at DNB Bank ASA. “Still, we believe the tight physical crude market eventually will push oil prices higher. We expect to see continued inventory decline into year end, the refinery margins are good, and we expect a significant ramp up of refinery runs in the weeks ahead.”
--With assistance from James Thornhill.
To contact the reporters on this story:
Elizabeth Low in Singapore at elow39@bloomberg.net;
Grant Smith in London at gsmith52@bloomberg.net
To contact the editors responsible for this story:
James Herron at jherron9@bloomberg.net
Helen Robertson, Amanda Jordan
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.
- ExxonMobil Racks Up Discoveries in Guyana Block Eyed by Chevron
- Oil Market Sentiment Has Improved Significantly
- EU, US Eye Collaboration on Nuclear Materials
- USA Driving Activity to Increase to All-Time Highs
- TC Energy to Sell Prince Rupert Gas Pipeline Project to First Nation
- EU Electricity Export to Ukraine Up 94 Percent in Two Years
- China Coal Output Falls for First Time since Government Ordered More
- BP Pulse Buys One of Europe's Largest Truck Stops
- UK CCUS Plans Outdated: Think Tank
- North America Enters Rig Loss Streak
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- EIA Drops 2024 Henry Hub Gas Price Forecast
- EIA and Standard Chartered Offer Up Latest Oil Price Predictions
- Red Sea Region Sees Another Watershed Incident
- Chevron Oil Project in Kazakhstan to Cost $48.5B
- OPEC Voices Encouragement after IEA Affirms Support for Oil Security
- Biden Govt Bares Strategy for Freight Charging, Hydrogen Fueling Infra
- Ukraine Hits Third Russian Refinery In Escalating Drone Strikes
- Rystad Looks at the Buzz Around White Hydrogen
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Is Peak Oil Demand Close?
- Vessel Sinks in Red Sea After Missile Strike
- JP Morgan, Standard Chartered Reveal Latest Oil Price Forecasts
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Rystad Forecasts Net Production of Top Permian Producers in 2024
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension