An updated Reuters poll of analysts forecast that us crude stockpiles rose for an eighth straight week last week, building by almost 2 million barrels to reach near-record highs above 490 million barrels seen in April.
Advertisement
Brent crude futures were down 77 cents at $43.79 a barrel by 11:15 a.m. EST (1615 GMT).
Concerns over the global oversupply of oil (a glut) outweighed geopolitical risk factors in the light of the Parisian atrocity to keep a lid on crude prices as the week began.
He said the French bombardment of IS (Islamic State) targets was mainly away from most major oil terminals “and therefore they are unlikely to cause any actual disruptions to supply”.
A few analysts have even suggested the outcome of the Paris attacks could reduce demand for oil, pushing prices further lower. Russian Federation sends 70 percent of its oil to Europe, but Saudi Arabia has been making inroads in the European market amid the oil price downturn. In the commodities market – though the players are individually seeking out the greatest degree of economic return for their efforts – the overall usefulness of the group is in the ability to absorb the shocks in supply or demand, until those shocks can be responded to by long horizon investment projects by the oil production community.
Spot gold rose as much as 1.4 per cent to a 10-day high of $US1,097.90 an ounce, and was up just 0.1 per cent at $US1,083.76 at 2.01pm EST (0501 Tuesday AEDT), hovering above last week’s six-year low at $US1,074.26.
Only two years earlier, the OPEC nations – reacting to American support for Israel in the Yom Kippur conflict – installed what became known as the Arab Oil Embargo on exports to the USA, triggering a national gas shortage and the dispiriting phenomenon of consumers lined up at stations around the country waiting for rations. “Macro headwinds remain, crude oil inventories are building”, Morgan Stanley said. For instance, the United States Short Oil (NYSEArca: DNO) tracks the opposite moves of the West Texas Intermediate crude oil futures, and the DB Crude Oil Short ETN (NYSEArca: SZO) also tracks the simple inverse of oil. The price for Brent crude oil increased 1.6 percent to $44.27 in early Wednesday trading.
The Wall Street Journal Dollar Index, which tracks the dollar against a basket of other currencies, rose 0.1% Tuesday on expectations that the Federal Reserve is due to raise interest rates in December.
Advertisement
The OPEC heavyweight pumped 10.226 million bpd in September, slightly lower than August’s 10.265 million but it still maintained high output in line with its strategy of defending market share.
