On Tuesday, crude futures settled down 3 percent after the world’s energy watchdog and OPEC both revised forecasts that signaled the global crude glut could persist much longer than expected.
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Wall Street slid. In 2.48pm trading in NY, the Dow Jones Industrial Average dropped 1.4 per cent, while the Nasdaq Composite Index shed 1.2 per cent. The Nasdaq composite lost 56.63 points, or 1.1%, to 5,155.26.
In a report published on Tuesday, IEA said Global oil demand growth is slowing at a faster pace than initially predicted. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.73% at $45.73 a barrel.
A Reuters poll forecast that US commercial crude oil stocks are likely to have risen last week after marking the largest plunge since 1999 in the previous week.
What’s confounding the analysts is that even with the low prices, more crude oil than ever is still coming up out of the ground in parts of the world.
United States stocks abruptly changed course again and took large losses as investors anxious about the possibility of a weaker global economy and tried to anticipate the Federal Reserve’s plans for interest rates.
Brent for November settlement slipped $1, or 2.1 per cent, to $47.32 a barrel on the London-based ICE Futures Europe exchange.
Exxon Mobil sank $1.99, or 2.3 percent, to $85.30 while Chevron shed $2.53, or 2.5 percent, to $99.72 and Marathon Oil stumbled $1.18, or 7.6 percent, to $14.29.
BONDS, CURRENCIES: U.S. government bond prices fell.
According to the report, Iran’s heavy crude price rose 58 cents or 1.4 percent to reach $42.17 in August, the figure was reported $41.59 for July.
Bond prices fell. The yield on the 10-year Treasury note rose to 1.71 percent.
Oil markets came under pressure because of the bearish oil market reports published by OPEC and the International Energy Agency (IEA) respectively.
DECLINERS: Only eight stocks in the S&P 500 index traded higher. Opec members, on the other hand, neared an all-time high, and this partly made up for losses in non-members. Analysts had expected supplies to rise by 1.4 million barrels from a week earlier.
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CHIP CHIP, HOORAY: Among the few gainers early Tuesday was chipmaker Intersil, which agreed to be bought by Renesas of Japan. Intersil climbed 1.94 dollars, or 9.8%, to 21.70 dollars. The chairman of Libya’s National Oil Corporation visited the port of Zueitina on Wednesday and said he would work to lift force majeure there, according to the head of a guard force in control of the terminal. Asian stocks were mostly higher on Tuesday after a Federal Reserve board member said she was in no hurry to raise interest rates, reassuring investors who were anxious that the rate hike could pull share prices lower. The stock has given up some of its gains lately.
