Oil expands 7 percent slide as the outlook gets darker
SINGAPORE (Reuters) – Oil markets fell again on Wednesday and expanded losses from a 7 percent dump last season as rising supply and the spectrum of staggering demand scared investors.
PHILPHOTO: Oil extracts from a spout from Edwin Drake's original 1859 well launching the modern petroleum industry at Drake Well Museum and Park in Titusville, Pennsylvania, USA, October 5, 201[ads1]7. REUTERS / Brendan McDermid / File Photo [19659003] USA Crude oil futures in the West Texas Intermediate (WTI) were $ 55.26 per barrel 0600 GMT, down 43 cents, or 0.8 percent, from their last settlement.
International benchmark Brent crude futures LCOc1 was down 36 cents, or 0.6 percent, at $ 65.11 per barrel.
Crude oil has lost more than a quarter of its value since the beginning of October, which has become one of the biggest downsides since a fall in prices in 2014.
Reuters technical commodity analyst Wang Tao said Brent and WTI both would probably fall further. a likely Brent range of $ 62.18- $ 63.95 per barrel and an expected WTI range of $ 53.26- $ 54.13 per barrel.
The decline in spot prices has hit the entire forward curve of crude oil upside down.
Spot prices in September were significantly higher than those for later delivery, a structure known as a reversal that involves a tight market, as it is not attractive to put oil in storage.
By mid-November the basket had turned into contango when the raw prices for immediate delivery are cheaper than those for later shipment. This entails an exaggerated market, as it makes it attractive to save oil for subsequent sales.
Oil markets are squeezed from two sides: an increase in supply and increasing concerns about an economic downturn.
US .. Crude oil production from its seven major slate bases is expected to hit record 7.94 million barrels per day (bpd) in December, the US Department of Energy Energy Information Administration (EIA) said Tuesday.
This increase in land-based production has helped total US crude production C-OUT-T-EIA hits record 11.6 million bpd, making the United States the world's largest oil producer in front of Russia and Saudi Arabia.
Most analysts expect US production to climb over 12 million bpd in the first half of 2019.
"In our opinion, this would have something higher than $ 85 a barrel (for oil prices)," says Jon Andersson, head of commodities at Vontobel Asset Management.
US production increases storage.
US. Commodities increased by 7.8 million barrels a week ending November 2 to 432 million as refineries cut production, data from The industry group American Petroleum Institute showed Tuesday.
The products' cartel from the Organization for Petroleum Exporting Countries (OPEC) has monitored the jump in offer and price decline with concern.
OPEC has been making frequent public statements that it would start crude oil in 2019 to tighten the offer and raise prices.
"OPEC and Russia are under pressure to reduce today's level of production, which is a decision we expect to be taken at the next OPEC meeting on 6 December, "Andersson said.
It sets OPEC on a collision course with US President Donald Trump, who publicly supports low oil prices and has asked OPEC not to cut production.
Reporting by Henning Gloystein; Editing Joseph Radford and Richard Pullin
