Oil Prices Drop Amid Libyan Dispute Resolution Hopes and Global Demand Concerns
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Brent crude futures for November fell 28 cents, or 0.4%, to $73.47 at 0052 GMT after dropping 4.9% in the previous session. U.S. West Texas Intermediate crude futures for October were down 31 cents, or 0.4%, to $70.03 after dropping 4.4% on Tuesday. MCX crude oil prices opened at 5900 with a fall of 0.32%.
Petroleum Price
- Oil prices fell on Wednesday, extending the previous day’s more than 4% plunge, due to expectations that the political dispute halting Libyan exports may be resolved, and concerns over lower global demand growth.
- Brent crude futures for November fell 28 cents, or 0.4%, to $73.47 at 0052 GMT after dropping 4.9% in the previous session. U.S. West Texas Intermediate crude futures for October were down 31 cents, or 0.4%, to $70.03 after dropping 4.4% on Tuesday.
- MCX crude oil prices opened at 5900 with a fall of 0.32%.
Petroleum Demand and Supply
- Libyan oil exports at major ports were halted on Monday, and production was curtailed across the country. Libya’s National Oil Corp declared force majeure on its El Feel oilfield on September 2.
- Market sentiment also weakened after the Institute for Supply Management data on Tuesday showed U.S. manufacturing remained subdued despite a modest improvement in August from an eight-month low in July.
- In China, the world’s biggest crude importer, recent data showed that manufacturing activity sank to a six-month low in August, and growth in new home prices slowed during the same month.
- Weekly U.S. inventory data has been delayed by Monday’s Labor Day holiday. The report from the American Petroleum Institute will be due at 4:30 p.m. EDT (2030 GMT) on Wednesday, and the Energy Information Administration report will be published at 11:00 a.m. EDT (1500 GMT) on Thursday.
- U.S. crude oil and gasoline stockpiles were expected to have fallen last week, while distillate inventories likely rose, according to a preliminary Reuters poll on Tuesday.
Petroleum News
- Crude oil prices saw a sharp decline in overnight trading as concerns over the state of the world’s two largest economies—The U.S. and China—reignited, triggering a sharp sell-off in equity markets across Wall Street and the Asia-Pacific region.
- Atul Suri of Marathon spoke to CNBC-TV18 earlier on Wednesday, stating that Brent crude could find strong support at the $70 level, but trends may turn worrisome if it slips below that level.
- In response to the fall in crude oil prices, shares of oil market companies traded with gains on Wednesday, despite an overall weak market.
- Shares of HPCL were the outperformers in today’s session, rising as much as 4%. BPCL and Indian Oil also saw gains before cooling off from the day’s highs.
Expert Opinion
It is expected that crude oil prices remaining largely within a certain range will continue to positively impact our market economy. With the recent adverse data from the U.S. manufacturing sector and a decline in crude prices, the outlook could be favorable, particularly for some of the sectors and companies highlighted.
Daily Market Report
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