Sign Up for FREE Daily Energy News
  • Stay Connected
  • linkedin
  • twitter
  • facebook
  • youtube2

Copper Tip Energy Services
Vista Projects
Vista Projects
Copper Tip Energy

Oil Trades Near Six-Month Low as Fears of a Shortage Subside

These translations are done via Google Translate
Nov 5, 2018, by Sharon Cho and Grant Smith


Oil traded near a six-month low as the prospects of a tight global market at the end of year further receded after the U.S. softened the restart of sanctions against Iran.

Crude in New York slipped 0.4 percent, falling for a sixth day. Sanctions against Iran snapped back on Monday, though eight countries were allowed to continue buying some crude from the country, according to U.S. Secretary of State Michael Pompeo. Hedge funds reduced bullish bets for an eighth week as extra supplies from OPEC and the U.S. assuaged concerns of a potential shortfall.

“The U.S. has done a U-turn as compared with its previous announcements” on Iran, said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt. “It thus comes as no surprise that speculators are squaring their net long positions in crude oil, which is likewise weighing on prices.”

Oil slid from a four-year high last month as speculation grew that Washington would grant waivers on Iranian sanctions to lower pump prices ahead of the U.S. midterm elections, while other producers in the Organization of Petroleum Exporting Countries pledged to offset any supply gaps. Meanwhile, a trade war between the world’s two biggest economies stoked concern that fuel demand would suffer even as President Donald Trump said he wants to reach a pact with China.

ROO.AI Oil and Gas Field Service Software

West Texas Intermediate crude for December delivery dropped as much as 1 percent to $62.52 a barrel on the New York Mercantile Exchange, the lowest since April 9, and traded at $62.87 as of 10:35 a.m. London time. A sixth daily decline would mark the longest losing streak in nine months. Futures slid 6.6 percent last week. Total volume traded Monday was about 5 percent below the 100-day average.

Brent futures for January settlement dropped 11 cents to $72.72 a barrel on the London-based ICE Futures Europe exchange. Prices fell 6.2 percent last week, the biggest weekly decline in nine months. The global benchmark crude traded at a $9.71 premium to WTI for the same month.

A day before U.S. sanctions on Iran’s energy and shipping industries were due to be reimposed, Pompeo said on “Fox News Sunday” that the president’s “policy of maximum pressure will be fully in place” on Monday. He wouldn’t say whether India and China are getting waivers, or if they’d delivered commitments to stop their purchases.

Bloomberg reported earlier that India, Japan and South Korea were said to be among those approved for waivers, and China — a major importer of Iranian oil — was in discussions on terms but was among the eight countries getting exemptions.

Other oil-market news: Hedge funds reduced bets on rising WTI crude prices for an eighth straight week, the longest streak of reductions on record. The funds’ net-long position in WTI crude slid 5 percent to 196,196 futures and options in the week ended Oct. 30, according to the U.S. Commodity Futures Trading Commission. Abu Dhabi’s top oil-policy body approved a $132 billion five-year budget for the government-owned energy producer to expand crude output capacity and increase supply of natural gas. Oil capacity will rise to 4 million barrels a day by the end of 2020 and to 5 million barrels daily by 2030.

Share This:

More News Articles