Oil Prices Slide: In another session of losses, oil prices faced a dual impact from increased U.S. supply signals and worries about sluggish energy demand from China. Brent futures slipped 72 cents to $80.46 a barrel, and U.S. West Texas Intermediate crude (WTI) shed 67 cents to $75.99 a barrel, both marking declines exceeding 1.5% from the prior session.
Adding to the market’s woes, WTI’s front-month contract traded below the second month, a condition known as contango, indicating investor expectations of future price increases. The front month’s discount to the second month reached minus 13 cents on Thursday. “Concerns over a record-high U.S. production rate put fresh pressure on oil prices, adding to an already worrisome demand outlook,” expressed Tina Teng, a markets analyst at CMC Markets in Auckland.
The U.S. Energy Information Administration (EIA) reported a significant increase in U.S. crude stocks, rising by 3.6 million barrels last week to 421.9 million barrels, far surpassing the expected 1.8 million-barrel rise in a poll. Meanwhile, U.S. crude production held steady at a record 13.2 million barrels per day (bpd).
Also Read: Oil Prices Slide Amidst Caution Over Fed Meeting and China Data
In Asia, China’s oil refinery throughput declined in October due to weakening industrial fuel demand and narrower refining margins. Despite this, October saw an uptick in economic activity, with industrial output accelerating and retail sales growth surpassing expectations.
However, concerns persisted around China’s property sector as new home prices fell for the fourth consecutive month in October, accompanied by a 20.33% year-on-year decline in property sales by floor area.
Technical factors also played a role in suppressing upward price movement, according to Jun Rong Yeap, a market strategist at IG in Singapore. “Given that the tighter oil supply-demand dynamics have been less prominent from months ago, there has been some unwinding in previous bullish positioning ever since, with prices falling back below their 200-day moving average as a sign of sellers in control,” remarked Yeap.
Our Reader’s Queries
What is the price of West Texas Intermediate crude oil today?
The current WTI Crude Oil Spot Price stands at 70.62, which is a decrease from the previous market day’s 71.89. This represents a -1.77% change from the previous market day.
What is the oil price forecast for 2023 WTI?
In October 2023, the average price of WTI crude oil was $86/b. Our projection for 2024 is that the WTI crude oil price will remain relatively stable, with an average of $89/b throughout the year. The three scenarios we have considered all have a common average price of $86/b in November 2023, but diverge thereafter.
Is oil expected to go up or down?
Our analysis predicts a rise in the Brent crude oil spot price, with an expected increase from $78/b in December to $84/b in the first half of 2024. This is due in part to the recent OPEC+ production cuts. However, despite these cuts, we have revised our forecast for the Brent price in 2024 to a lower level.
Are oil prices coming down?
The announcement of a combined 2.2 million barrels per day (bpd) in voluntary output cuts for the first quarter of next year by OPEC+ has resulted in a 10% drop in oil prices. This move by the Organization of the Petroleum Exporting Countries (OPEC) and its allies has had a significant impact on the market.