Oil biggest monthly decline since 2016 coming up on growth fears
Andrey Rudakov/Bloomberg
Oil has lost more than 10 percent after breaching $76 a barrel earlier this month.
-
Trade spat, swelling U.S. stockpiles contribute to Oct. loss
-
WTI trades below $67/bbl, heading for a 9.4% drop this month
By
Heesu Lee
SEOUL
Petroleumworld 10 31 2018
Oil's on track for its worst month since 2016 as the specter of a slowing global economy haunts the market that's grappling with growing U.S. inventories and mixed signals from producers.
Futures in New York are poised for a 9.4 percent drop this month, ending two months of gains. Prices had surged to a four-year high earlier this month on concerns over a worldwide supply squeeze as impending American sanctions started to curb Iran's exports. But the rally fizzled out as a rout in global equities and an escalating trade dispute between the U.S. and China dampened the outlook for global growth and energy demand.

Oil has lost more than 10 percent after breaching $76 a barrel earlier this month. With U.S. sanctions against the Persian Gulf state taking effect later this week, investors are assessing different output signals from Organization and Petroleum Exporting Countries and its allies. Saudi Arabia, which is under scrutiny over the killing of journalist Jamal Khashoggi, has said the group is in “produce as much as you can mode,” while an OPEC committee said it could cut supplies next year.
“In the oil market, concerns continue to exist over the ongoing U.S.-China trade spat as well as the risk aversion sentiment that's caused by a plunge in global shares,” Kim Kwangrae, a commodities analyst at Samsung Futures Inc., said by phone. “Prices couldn't remain above $75 a barrel this month on rising U.S. inventories and strong indication from Saudi Arabia to ramp up production.”
West Texas Intermediate for December delivery traded at $66.35 a barrel on the New York Mercantile Exchange, up 17 cents, at 1:45 p.m. in Seoul. The contract had declined more than 2 percent in the past two sessions. Total volume traded was about 22 percent below the 100-day average.
Brent for December settlement, which expires Wednesday, added 47 cents to $76.38 a barrel on the London-based ICE Futures Europe exchange. Prices are on course for a 7.7 percent drop this month, the biggest monthly loss since July 2016. The global benchmark crude traded at a $10.03 premium to WTI. The more-active January contract is up 0.6 percent.
See also: U.S. Oil Output Likely to Exceed EIA's Forecast, Rystad Says
In the U.S., the industry-funded American Petroleum Institute was said to report crude inventories expanded by 5.69 million barrels last week. If it's confirmed by the Energy Information Administration data on Wednesday, it will be a sixth consecutive week of gains, the longest streak of increases since March 2017.
Meanwhile, both Russia and Saudi Arabia have been raising production to ease supply shortages and to meet demand from U.S. President Donald Trump to lower prices. Russian Energy Minister Alexander Novak said he sees no grounds for reducing output and that there's the risk of a deficit in crude markets, while the Saudis have already boosted production to 10.7 million barrels a day, near an all-time high.
Original article
_________________________
_________________________
Copyright© 1999-2018 Petroleumworld or respective author or news agency. All rights reserved.
We welcome the use of Petroleumworld™ (PW) stories by anyone provided it mentions Petroleumworld.com as the source.
Other stories you have to get authorization by its authors. Internet web links to http://www.petroleumworld.com are appreciated.
Petroleumworld welcomes your feedback and comments, share your thoughts on this article, your feedback is important to us!

We invite all our readers to share with us
their views and comments about this article.
Write to editor@petroleumworld.com
By using this link, you agree to allow PW
to publish your comments on our letters page.
Any question or suggestions,
please write to: editor@petroleumworld.com
Best Viewed with IE 5.01+ Windows NT 4.0, '95, '98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels