23 October 2013 15:36 [Source: ICIS news]
LONDON (ICIS)--NYMEX WTI crude oil futures extended losses on Wednesday afternoon on poor US jobs report, expectations of another build in US crude stocks and deteriorating Saudi/US relations.
By 13:30 GMT, the front-month December NYMEX WTI contract extended losses, falling to an intra-day low at $96.23/bbl, a loss of $2.07/bbl compared to the previous settlement. The contract then edged higher to trade around $96.45/bbl.
At the same time, the front-month December ICE Brent contract was trading around $109.30/bbl, having touched an intra-day low earlier at $108.86/bbl, a loss of $1.11/bbl compared to the close on Tuesday.
Crude oil futures were pressured by the delayed September US jobs report that showed the US added only 148,000 jobs in September, lower than the forecast of 180,000 jobs, indicating that the US economic recovery remains fragile. The poor jobs report is likely to provide further incentive for the US Federal Reserve to postpone the tapering of its massive $85bn/month asset purchase programme.
Adding to the bearish sentiment in the market, US crude oil stocks are expected to have increased last week by 2.90m barrels, according to forecasts. Crude stocks rose by 4m barrels a fortnight ago, according to a delayed stock report from the US Energy Information Administration. The delay in publication was caused by the temporary partial shutdown of the US government due to a stand-off between US lawmakers regarding the US budget and debt ceiling. The 16-day partial shutdown of the US government cost the US economy approximately $24bn, according to preliminary findings by Standard & Poor’s.
Saudi/US relations are also deteriorating after Saudi Arabia's intelligence chief said it will make a major shift in its relations with the US in protest over US inaction over Syria’s civil war and improving Iran-US relations.
Saudi Arabia shocked the diplomatic community last week after it announced that it would not be taking a rotating seat alongside the five permanent members of the UN Security Council because the group has failed to bring peace to the Middle East. The five permanent members of the UN Security Council comprise the UK, France, the US, Russia and China.
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