Key market uncertainties include the pace and volume at which Iranian oil reenters the market, the strength of oil consumption growth, and the responsiveness of non-OPEC production to low oil prices. In last two trading days, it lost almost 7%. Futures touched $40.81, the lowest level since Aug 27.
Advertisement
Crude stockpiles Stateside, excluding those in the strategic petroleum reserve, increased by 4.2m barrels during the week ending on 6 November, according to the Energy Information Administration, the US Department of Energy’s statistical arm. The EconoTimes content received through this service is the intellectual property of EconoTimes or its third party suppliers.
Oil prices have plunged by more than half from peaks of over $100 a barrel in mid-2014.
The IEA’s latest market report renewed concerns over the global supply overhang that has driven a 60 per cent collapse in oil prices since past year.
Now, Reuters data shows that open interest in put options in Us crude futures – which shows the number of unsettled deals betting on lower prices – has soared over the past four weeks.
Refinery crude runs rose by 302,000 barrels per day, EIA data showed, pushing output to its highest rate on record for this time of year.
On the NY Mercantile Exchange, WTI crude for December delivery traded between a range of $40.23 and $42.20 a barrel before settling at $40.70, down 1.08 or 2.57% on the day.
USA crude’s West Texas Intermediate (WTI) benchmark was down $1 at $43.21 a barrel.
For 2015 though, the report implies a much larger surplus of nearly 1.8 million bpd due to high OPEC production and the still-growing rival supplies that have boosted inventories.
Global oil demand growth has not been fast enough to soak up the excess in supplies and analysts say a rebalancing of the supply-demand situation is needed for a sustained uptick in prices.
OPEC member Ecuador said at an Arab-South American summit in Riyadh that the only way to balance the market was to cut production and it aimed to reach an agreement on that at the producer group’s December meeting.
Advertisement
Analysts have projected that the crude oversupply will last well into next year.
