Oil Prices rise Higher Despite Crude BuildNaija247news

03 November, 2018, 05:15 | Author: Frank Williams
  • Oil price falls to $75 from high of $86

Oil fell on Thursday on course for its fourth consecutive week of decline, as rising crude supply met the bearish combination of concern over global growth and weak equity markets.

WTI crude future prices for front-month delivery traded as of 10:03 a.m. just over 2 percent lower at $65.68 per barrel, while front-month Brent future prices traded 2.3 percent lower at $75.62 per barrel at the same time.

The WTI and Brent crude oil benchmarks ended the day lower Tuesday. Posting a sharper, 1.8-percent decrease Tuesday was the December Brent contract, which slipped $1.43 to end the day at $75.91. They dropped 1.3 percent the day before, after hitting their weakest since August 17 at $65.33 a barrel.

The American Petroleum Institute (API) reported yet another crude oil inventory build this week, this time of 5.69 million barrels for the week ending October 26.

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

Oil has been caught in the global financial market slump this month, with equities under pressure from the trade war between the world's two largest economies.

The United States has imposed tariffs on $250 billion worth of Chinese goods, and China has responded with retaliatory duties on $110 billion worth of USA goods. Earlier fears that American sanctions on Iran could result in a crude shortage are also receding, as the USA shale boom gains new momentum and the Trump administration vacillates on how aggressively to target Iranian exports. He did not elaborate. The last week of October saw crude oil continue to trade bearish owing to firm Dollars in broad market and bearish equity markets putting pressure on purchasing power of investors from Asia and other emerging markets. Futures dropped 0.6 percent in NY, taking the weekly loss to 6.3 percent, the biggest since February.

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Because of the concerns about possible shortage of supply due to US sanctions on Iran, the oil market is also beginning to be anxious about possible oversupply and inventories that are rising in many other parts of the world.

On top of that you had a report from Reuters that showed OPEC production at the highest levels since 2016.

Meanwhile, Libya has restarted three small oil fields and added around 10,000 bpd to its oil production-which has been steadily rising over the past two months as per comments from spokesman for Libya's National Oil Corporation (report from Reuters).

Earlier fears that American sanctions on Iran could result in a crude shortage are also receding, as the US shale boom gains new momentum and the Trump administration vacillates on how aggressively to target Iranian exports.

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

The looming sanctions on Iran's energy sector, which go into full force November 4, have played a major part in the oil market's rally to almost four-year highs in early October.

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