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HOUSTON: Oil prices fell about 2% on Thursday, continuing the previous session’s losses of almost 6% as uncertain demand prospects overshadowed an Opec+ decision to preserve oil production cutswhich keeps supply tight.
Global benchmark Brent crude futures have fallen about $10 a barrel in less than 10 days, after crossing nearly $100 in late September.
The combined percentage decline over the past two days was the steepest since May for both crude benchmarks.
Brent futures fell $1.38, or 1.6%, to $84.43 at 1:41 PM ET (1741 GMT). U.S. West Texas Intermediate crude futures were down $1.38 cents, or 1.6%, at $82.83.
“This is a typical speculative trading activity: trying to make the best of a bad situation after Wednesday’s massacre, and they (market participants) are trying to hit the bottom,” said Bob Yawger, director of energy futures at Mizuho.
Oil was more than $5 lower on Wednesday – the biggest daily drop in more than a year, even after a meeting of a ministerial panel from OPEC+, the Organization of the Petroleum Exporting Countries and allies led by Russia.
The country has made no changes to the group’s oil production policy, and Saudi Arabia said it would maintain a voluntary cut of 1 million barrels per day (bpd) until the end of 2023, while Russia will maintain a voluntary export cut of 3,00,000 barrels per day would maintain until the end of 2023. end of December.
However, investors are concerned about the spike in demand Fuel consumption is behind us, said Dennis Kissler, senior vice president of trading at BOK Financial, adding that hedge funds were heavily liquidated over fears that higher interest rates combined with inflation would undermine demand.
“The market is looking for an equilibrium,” Kissler said.
Close-to-close volatility on Brent was at its highest level since May, while WTI was at its highest since June.
The market will be in deficit throughout the fourth quarter and softer prices reduce the likelihood OPEC will ease supply constraints, National Australia Bank analysts said.
Government data also showed a sharp drop in U.S. gasoline demand on Wednesday. Delivered finished motor gasoline, a measure of demand, fell last week to the lowest level since the beginning of this year.
“I don’t see gasoline demand getting much above 8.5 million barrels per day before the holiday shopping season starts and that’s going to be a problem for the market,” said John Kilduff, partner at Again Capital LLC in New York.
Other data on Wednesday showed the US services sector slowed, while the euro zone economy likely shrank last quarter, according to a survey.
The U.S. dollar fell but remained near an 11-month high, making crude more expensive for foreign buyers.
On Thursday, Turkey’s energy minister said a crude oil pipeline from Iraq through Turkey, which has been suspended for about six months, was ready for use.
Global benchmark Brent crude futures have fallen about $10 a barrel in less than 10 days, after crossing nearly $100 in late September.
The combined percentage decline over the past two days was the steepest since May for both crude benchmarks.
Brent futures fell $1.38, or 1.6%, to $84.43 at 1:41 PM ET (1741 GMT). U.S. West Texas Intermediate crude futures were down $1.38 cents, or 1.6%, at $82.83.
“This is a typical speculative trading activity: trying to make the best of a bad situation after Wednesday’s massacre, and they (market participants) are trying to hit the bottom,” said Bob Yawger, director of energy futures at Mizuho.
Oil was more than $5 lower on Wednesday – the biggest daily drop in more than a year, even after a meeting of a ministerial panel from OPEC+, the Organization of the Petroleum Exporting Countries and allies led by Russia.
The country has made no changes to the group’s oil production policy, and Saudi Arabia said it would maintain a voluntary cut of 1 million barrels per day (bpd) until the end of 2023, while Russia will maintain a voluntary export cut of 3,00,000 barrels per day would maintain until the end of 2023. end of December.
However, investors are concerned about the spike in demand Fuel consumption is behind us, said Dennis Kissler, senior vice president of trading at BOK Financial, adding that hedge funds were heavily liquidated over fears that higher interest rates combined with inflation would undermine demand.
“The market is looking for an equilibrium,” Kissler said.
Close-to-close volatility on Brent was at its highest level since May, while WTI was at its highest since June.
The market will be in deficit throughout the fourth quarter and softer prices reduce the likelihood OPEC will ease supply constraints, National Australia Bank analysts said.
Government data also showed a sharp drop in U.S. gasoline demand on Wednesday. Delivered finished motor gasoline, a measure of demand, fell last week to the lowest level since the beginning of this year.
“I don’t see gasoline demand getting much above 8.5 million barrels per day before the holiday shopping season starts and that’s going to be a problem for the market,” said John Kilduff, partner at Again Capital LLC in New York.
Other data on Wednesday showed the US services sector slowed, while the euro zone economy likely shrank last quarter, according to a survey.
The U.S. dollar fell but remained near an 11-month high, making crude more expensive for foreign buyers.
On Thursday, Turkey’s energy minister said a crude oil pipeline from Iraq through Turkey, which has been suspended for about six months, was ready for use.
