Oil Prices rise Higher Despite Crude BuildNaija247news

Oil price falls to $75 from high of $86

Oil price falls to $75 from high of $86

Hedge funds are still overwhelmingly long oil and may have to liquidate positions if prices keep falling, accelerating a market sell-off, analysts say. "China trade war, monetary policy tightening, fears of a hard Brexit (and) Italy's budget woes" as main reasons for the selloffs.

A Wednesday Reuters survey of OPEC production shows the group made up for declines in Iranian shipments in October by boosting production to its highest level since 2016.

The EIA's report failed to lift the mood around WTI after U.S. crude oil inventories rose by 3.217M barrels during last week.

Front-month Brent crude oil futures LCOc1 were trading down 46 cents, or 0.6 per cent, at $77.16 a barrel at 0745 GMT on Tuesday.

Earlier in the session, Brent reached a session low of US$75.09 a barrel, the lowest since Aug 24.

Both crude benchmarks have fallen about $10 a barrel from four-year highs reached in the first week of October, and are on track to post their worst monthly performance since July 2016. Investors are weighing market sentiment ahead of new US sanctions on Iran that begin on November 4.

Brent and US futures have dropped on growing concern over a possible slowdown in global growth as the U.S-China trade dispute remains unresolved, and is starting to hit emerging market economies in particular.

Hansen said talk of USA waivers from the sanctions potentially being granted to India and South Korea may also reduce the ability of the sanction to impact Iran's ability to produce and export crude oil. Worry over demand getting hit because of trade tensions between the United States and China also pushed prices lower.

The American Petroleum Institute is due to release its weekly US oil inventory report Tuesday at 4:30 p.m. EST, which is available only to subscribers.

According to API data, the six-week running tally of crude oil inventory gains equals 27 million barrels.

That is an increase of 10 million bpd since the start of the decade and means the three producers alone now meet a third of global crude demand.

The markets could turnaround quickly if a trade deal between the United States and China is announced, but gains are likely to be limited until there is clarity over the impact of the sanctions on Iran which begin on Sunday.

Russian Federation has also indicated that it will provide enough oil to meet demand once U.S. sanctions hit Iran from next week.

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