[1/2]Storage tanks are seen at Marathon Petroleum's Los Angeles Refinery, which processes domestic & imported crude oil into California Air Resources Board (CARB) gasoline, CARB diesel fuel, and other petroleum products, in Carson, California, U.S., March 11, 2022. REUTERS/Bing Guan/File Photo Acquire Licensing Rights
NEW YORK, Nov 16 (Reuters) – Oil prices dropped around 5% on Thursday to their lowest in four months, as investors worried about global oil demand following weak data from the U.S. and Asia.
Brent futures settled down $3.76, or 4.6%, to $77.42 a barrel. U.S. West Texas Intermediate crude (WTI) shed $3.76, or 4.9%, to $72.90. Both Brent and WTI earlier traded at their lowest since July 7, at $76.60 and $72.16, respectively.
Both WTI and Brent's front-month contracts also traded below later-dated contracts, a structure known as contango.
"The mood is negative, the charts are negative," said Phil Flynn, an analyst at Price Futures Group. "It's going to take something to change that mood, and until then people will ride it down until they realize it's overdone."
The number of Americans filing new claims for unemployment benefits increased to a three-month high last week, suggesting that labor market conditions continued to ease.
The report came after other data that showed U.S. retail sales fell for the first time in seven months in October as motor vehicle purchases and spending on hobbies dropped. This pointed to slowing demand at the start of the fourth quarter that further strengthened expectations the Federal Reserve is done hiking interest rates.
OPEC and the International Energy Agency (IEA) have both predicted supply tightness in the fourth quarter, but U.S. data on Wednesday showed inventories were abundant.
Meanwhile, an expected slowdown in Chinese oil refinery throughput also gave investors pause. Runs eased in October from the previous month's highs as industrial fuel demand weakened and refining margins narrowed.
Still, Chinese economic activity rallied in October as industrial output increased at a faster pace and retail sales growth beat expectations.
"The current price drop is taking place amid a seemingly auspicious backdrop, which suggests that investors simply do not buy into the 'Q4 stock draw' narrative; something that is not backed up by the recent weekly EIA reports either," said Tamas Varga of oil broker PVM.
As the Israel-Hamas conflict appeared to be escalating in Gaza, U.S. officials on Wednesday said they would enforce oil sanctions against Iran, which has long been a backer of Hamas.
Reporting by Stephanie Kelly, Natalie Grover and Andrew Hayley; Editing by David Goodman, Barbara Lewis, Jane Merriman and Cynthia Osterman
Our Standards: The Thomson Reuters Trust Principles.
Thomson Reuters
A New-York-based correspondent covering the U.S. crude market and member of the energy team since 2018 covering the oil and fuel markets as well as federal policy around renewable fuels. Contact: 646-737-4649
Sickle cell disease is a painful, inherited blood disorder that affects an estimated 100,000 people in the United States, most of whom are Black.
Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers.
Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology.
The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs.
The industry leader for online information for tax, accounting and finance professionals.
Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile.
Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts.
Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks.
All quotes delayed a minimum of 15 minutes. See here for a complete list of exchanges and delays.
© 2023 Reuters. All rights reserved
Oil prices slump to 4-month low on U.S., Chinese economic concerns – Reuters
Leave a comment