Oil Prices Slide After API Reports Large Crude Build

Clay Curtis
November 9, 2018

Futures in NY are slipping for a 10th day, extending a dramatic plunge that's dragged prices down over 20 percent from a 2014-high just five weeks ago.

Iran is likely to ride out the storm from U.S. oil sanctions, suffering recession but no economic meltdown, thanks to rising crude prices and deepening divisions between the United States and other major powers, officials and analysts say. Pledges by other producers such as Saudi Arabia to pump more and record American supply as well as rising stockpiles also weighed on prices.

Meanwhile, U.S. crude inventories rose by 5.8 million barrels in the week ending November 2, to 431.79 million barrels, the EIA said.

While the outcomes of those elections are uncertain, accelerating production in the Permian, an oil-rich area in the USA, could weigh on Brent prices as soon as next year.

West Texas Intermediate crude futures for December delivery dropped US$1 to settle at US$60.67 a barrel on the New York Mercantile Exchange, the lowest level since March. Still, Brent is poised for an nearly 3 percent drop for the week, its fifth straight week of decline.

Total volume traded was about 20% above the 100-day average. A further drop is on the cards for November, with the caveat that tracking Iran's exports has become more hard given that state-owned tankers are turning off their vessel-monitoring systems. The global benchmark crude traded at a $9.93 premium to WTI for the same month.

Mariota magic as Titans stifle stumbling Cowboys
The Titans took a 21-14 lead when Mariota hit Smith for a 7-yard scoring pass with 5:44 left in the third quarter. "Listen, Dak is the quarterback of the Dallas Cowboys ", Jones said on 105.3 The Fan in Dallas on Tuesday.

A return to oil production cuts by OPEC and its allies next year cannot be ruled out, two OPEC sources said on Wednesday, to avert a possible supply glut that could weigh on prices.

The United States, Russia and Saudi Arabia are pumping at or near record highs, producing more than 33 million barrels per day (bpd), a third of the world's oil.

The net long position in the six most important petroleum-linked futures and options contracts was cut by a further 73 million barrels in the week to October 30. While Iran's exports may stabilise around 1.2 million barrels per day (mbpd), there is actually potential for an increase in export given that Japan and South Korea (beneficiaries of the United States wavier) may start to import from Iran, asserted an expert.

Forecasters also lowered their estimates for oil demand growth last month, taking some of the froth out of the market.

"If Iranian tankers make calls to your ports or transit through your waterways, this comes at great risk", Brian Hook, the State Department's special representative on Iran policy told journalists.

While sanctions under the previous Barack Obama administration restricted Iran's export capacity to one million barrels per day, the Trump administration wanted to hurt Tehran further by reducing exports to zero, a strategy that didn't work due to limited spare capacity in the global oil markets.

Other reports by

Discuss This Article