ANZ bank said it expected prices to remain low for the remainder of this year and that speculators were cutting their bets on higher prices. This will result in low intake of crude oil by refineries. Brent crude for December delivery decreased 45 cents to close at $47.54 a barrel on the London ICE Futures Exchange. The US Energy Information Administration will publish the official inventory figures on Wednesday.
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The US plans to sell millions of barrels of crude oil from its Strategic Petroleum Reserve from 2018 until 2025 under a budget deal reached on Monday night by the White House and top lawmakers from both parties. “We have seen weakness on the market since Friday and prices are approaching the level where you could consider the market to be oversold, but there is still a downward trend”.
Likewise, December WTI (West Texas Intermediate) crude oil futures contracts settled at $43.98 in Monday’s trade. If the drop in oil investment continues for one more year, then it’ll be first time in the last two decades that oil investment eased for the consecutive two years.
Just recently we saw reports from OPEC that they had produced roughly 31 million barrels a day in the month of September, the most they had produced since 2012.
USA production cuts – from a peak of around 9.6 million barrels a day to around 9.1 million – and optimism over demand have failed to translate into higher prices, said Ric Spooner, chief market analyst at Sydney’s CMC Markets. Few expect the Fed to raise interest rates because USA inflation is low and the economic recovery remains uneven.
CURRENCIES: The dollar fell to 120.37 yen and the euro edged down to $1.1041 from $1.1057.
Natural gas futures remained flat at 2.353 a gallon at the NYMEX.
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An expected further build in U.S. crude stocks and a glut of refined products again raised concerns of an oversupplied market.
