Both references are heading for their third daily decline and their lowest levels since mid-September.
The oil prices fell nearly 2% today to three-week lows due to the expiration of a higher-priced Brent contract, strengthening of the dollar American, as well as the taking of profits by operators, concerned about the forecasts of increase of the supply of crude oil and the pressure on demand derived from high interest rates.
On its first day as a “front-month”, the futures of the Brent for delivery in December fall to US$90.78 a barrel, US$1.42 or 1.5% less than at the close of Friday, and also 4% less than at the close of the November futures on Friday, when it was still “front-month“. This is the largest daily percentage drop in Brent since the end of May.
American crude oil West Texas Intermediate (WTI) falls US$1.90, or 2.1%, to US$88.89 per barrel. Both references are directed to its third daily decline and its lowest since mid-September.
Oil: what’s behind the crash
Energy analysts cite profit taking after crude oil prices rose almost 30% in the third quarter, up to a maximum of 10 months. Late last week, American speculators had increased their net long positions in futures and options on the Mercantil Stock Exchanges and New York Intercontinental to the highest level since May 2022, according to data from the United States Commodity Futures Trading Commission.
Today, as reported Ambitthe dollar rises to highs of 10 months against a basket of other currencies in anticipation of the interest rates Americans could stay higher for longer, which could slow economic growth and reduce oil demand. A stronger dollar also makes oil more expensive for holders of other currencies.
The market is awaiting the comments of the president of the United States Federal Reserve (Fed), Jerome Powell to calibrate the central bank’s interest rate path. US Treasury yields rise today as a deal to avoid a partial government shutdown reduces demand for debt ahead of key jobs data due later this week.
Oil: Middle East in the market’s sights
On the other hand, the Turkish Energy Minister announces that the country will resume operations this week of an oil pipeline from Iraq, suspended for six months. Besides, Saudi Arabia could begin to ease its additional voluntary supply cut 1 million barrels per day (bpd), according to ING analysts in a note.
Likewise, the Organization of the Petroleum Exporting Countries (OPEC+), together with Russia and other allies, meets on Wednesday, but it is unlikely to modify its current oil production policy.
Source: Ambito
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