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Oil prices rise after 6% plunge, but market on edge

21 November, 2018, 15:05 | Author: Sara Gill
  • Oil pump jacks are seen next to a strawberry field in Oxnard

"We are now trading the January 2019 WTI Crude Contract on the Globex-Nymex exchange as today is the last trading day for the December 2018 futures contract", John Thorpe, a commodity broker at Los Angeles-based Cannon Trading, told UPI.

Crude imports in October climbed 10.5 percent from a year earlier to 21.02 million tonnes, the highest monthly import figure in PPAC data going back to April 2011. The global benchmark fell as much as 7.6 per cent to $61.71, the lowest since December 2017.

"For the time being it's more about risk", said Jim Ritterbusch, president of Ritterbusch and Associates.

The S&P 500 hit a three-week low on Tuesday as weak results and forecasts from big retailers fanned worries about holiday season sales, while tech stocks continued to slide on concerns about iPhone sales.

Brent crude sank to little more than $62 a barrel, its lowest level since last December.

Global stock markets have slumped in the past two months on worries about corporate earnings, rising borrowing costs, slowing global economic momentum and trade tensions.

Trump said he won't let the murder of journalist Jamal Khashoggi jeopardize USA relations with the Saudis as oil prices may "go through the roof" if the partnership between the two nations breaks.

Amid the uncertainty, financial traders have become wary of oil markets, seeing further price downside risks from the growth in US shale production as well as the deteriorating economic outlook.

Oil markets have been concerned about potential supply disruptions amid heightened tensions between the United States and Saudi Arabia over the killing.


US investment bank Goldman Sachs said on Wednesday the renewed price collapse reflected "concerns over excess supply in 2019..."

"I never really understood the premium behind some kind of friction between USA and Saudi Arabia from a policy standpoint".

Oil halted a slide near $54 a barrel as investors weighed industry data that showed USA crude inventories unexpectedly fell last week against doubts over Opec's plans to cut output.

Portfolio managers have sold the equivalent of 553 million barrels of crude and fuels in the last seven weeks, the largest reduction over a comparable period since at least 2013.

This has largely stemmed from the surprise drawdown in yesterday's API inventory report, which showed a 1.5mln barrel drop in stockpiles, against an expected 2.9mln barrel rise.

USA crude production C-OUT-T-EIA has soared nearly 25 percent this year, to a record 11.7 million barrels per day (bpd).

Russian Energy Minister Alexander Novak said Monday that the country and its OPEC allies need to watch the oil market in the coming weeks before making any decisions to reduce output.

"The global economy is still going through a very hard time and is very fragile", IEA chief Fatih Birol said.

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