Oil has slumped since the middle of a year ago as the Organization of Petroleum Countries keeps output elevated to pressure rivals it sees as responsible for creating a global surplus. Diesel futures slid 1.7 cents, or 1.2%, to $1.3681 a gallon, the lowest settlement since April 2009. On the NY Mercantile Exchange (NYMEX), prices of West Texas Intermediate (WTI) crude oil futures for December’s delivery increased by 99 cents to $41.73 per barrel in the Globex electronic session.
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Analysts expect another build in the inventories, which would indicate weaker demand in the world’s top oil consuming nation.
Income growth, coupled with slow economic momentum, offset a few of the consumer stimulus from lower crude oil prices.
“A year end recovery in commodity prices remains unlikely with a stronger US$ and EM (emerging market) growth concerns”, ANZ bank said, referring to a surge of the greenback versus most other currencies on the expectation that the U.S. Federal Reserve will raise interest rates soon.
Even as global stocks, including US futures, fell during early trade Monday, gold and oil prices were pushed higher, primarily by investors seeking refuge in safe-haven assets following last week’s deadly attacks in Paris.
While oil markets remain jittery, traders are hoping that the API data is confirmed by the US Department of Energy’s weekly stock report due to be announced later today.
Brent crude futures dropped $.85 to trade at $43.71 a barrel after closing up 2% the previous day.
OPEC’s crude production averaged 31.38 million barrels per day, according to OPEC’s recent monthly oil market report.
A narrower spread tends to encourage a greater flow of oil from overseas into the US market as crude grades that are pegged to the pricier Brent benchmark become more affordable.
While the latest fuel hike was part of the routine fortnightly price revision exercise by oil marketing companies, it should be considered that the Indian basket price in the preceding fortnight ranged between $44-46 a barrel.
The USA more than doubled its imports of oil from Iraq between August and September, according to a Platt’s analysis of U.S. Energy Information Administration statistics.
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Weakness in Asia’s two biggest economies, China and Japan, is also weighing on prices.
