Economic Concerns Put Oil Prices on Track for a Fourth Consecutive Weekly Loss - OilPrice.com
Economic Concerns Put Oil Prices on Track for a Fourth Consecutive Weekly Loss | OilPrice.com
OPEC Said To Consider Additional 1 Million Bpd Output Cut
Central Asia is witnessing a…
On Wednesday November 8, NuScale…
Crude oil prices are headed for their fourth consecutive losing week after slumping by some 5% on Thursday to the lowest in four months.
The reason for the latest daily slump was weak economic data from the United States and China, Reuters reported, noting that both Brent and WTI had sunk to the lowest since July.
"The mood is negative, the charts are negative," Phil Flynn, an analyst at Price Futures Group, told Reuters. "It's going to take something to change that mood, and until then people will ride it down until they realize it's overdone."
The latest cause for that mood was retail sales data from the U.S., which showed the first monthly decline in sales since spring, and a slowdown in Chinese refinery activity, even though that was neither surprising nor mysterious. Refiners simply ran out of fuel export quotas.
Meanwhile, however, the U.S. Energy Information Administration reported a build in crude oil inventories for the week to November 10, which added to the bearish sentiment, especially as it came after a sizeable weekly build of almost 14 million barrels two weeks earlier.
According to Bloomberg, oil has sunk into a bear market. The report cited the International Energy Agency’s latest Oil Market report that said supply growth was stable, especially among non-OPEC producers.
Analysts expect this to pressure OPEC into acting to curb supply even more in a bid to prop up prices.
“We believe that OPEC will ensure that Brent oil prices end up in a $80-to-$100 range in 2024 by ensuring a moderate deficit and leveraging its pricing power,” Goldman Sachs analysts wrote in a note.
ING analysts, meanwhile, noted that The US administration said that it would enforce oil sanctions against Iran following renewed tensions in the Middle East.”
They added that if sanctions are indeed enforced more tightly, they could lead to the loss of between 500,000 bpd and 1 million bpd of Iranian oil, which would keep global supply tight through 2024.
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By Irina Slav for Oilprice.com
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Related Knowledge Center: ENERGY BASICS: petroleum
While electric-powered vehicles may be the ride of the future, oil remains at least for now the dominant fuel for transportation around the world. And after a period of time at the end of the 20th century when oil was subject to wide fluctuations in price, new supplies in North America as a result of non-conventional recovery techniques have helped stabilize prices.