Crude oil futures fall 0.31% on weak global cues

Ivan Schwartz
November 3, 2018

Therefore, the price could continue to drop until the OPEC members meet in December at Vienna.

His latest thoughts came with USA benchmark West Texas Intermediate crude on track for its worst month in more than two years. Refinery utilization rates rose by 0.2 percentage points.

WTI-Cushing spot prices averaged about $68/b in August, down from the July average of $71/b.

There has been concern that in the context of the US sanctions against Iran, which are now set to take effect on November 4, Saudi Arabia could cut crude supply in retaliation for potential sanctions against it over the disappearance of Saudi journalist Jamal Khashoggi.

Schork thinks that the crude oil prices are now at a key level of support.

"The market has moved from expectations of massive supply scarcity in the fourth quarter to quite opposite expectations of a looming oversupply", said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt.

The reign as world's biggest oil producer may be short-lived: Russian Federation in September produced 11.37 million barrels a day and they may be above 11.4 million in October. Namely, US production levels.

Brent crude futures fell US$1.43, or 1.9 per cent, to settle at US$75.91 a barrel. Otherwise they will face US punishments.

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Adding to the negative impact of the OPEC output figures, the U.S. Energy Information Administration on Wednesday reported a sixth straight week of builds in U.S. crude inventories.

WTI Crude Oil (Light Sweet) price at NYMEХ Stock Exchange down by 0.51% to $66.35 per barrel.

With Russia pumping oil at a post-Soviet high, USA crude output at more than 11 million barrels per day (bpd.), concerns about renewed US sanctions on Iran have faded in recent days.

Still, Goldman Sachs on Thursday reiterated a year-end forecast for Brent prices of $80 barrel.

Four major Asian buyers of Iranian crude imported a total of 1.13 million barrels per day (bpd) from Iran in September, the data released by Reuters showed.

The focus now remains on the USA jobs report for fresh impetus on the USD-sensitive commodity ahead of the U.S. rigs count data release.

However, U.S. equities rebounded strongly on Thursday, with the Nasdaq Composite Index jumping about 3 percent in late trading, soothing anxious investors to some extent. The last week of October saw crude oil continue to trade bearish owing to firm United States dollars in broad market and bearish equity markets putting pressure on purchasing power of investors from Asia and other emerging markets.

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