US crude futures plunge $1.47/bbl on profit-taking

The benchmarks rallied close to $8.00/bbl last week on speculation that OPEC producers and Russia could agree to freeze output during September’s International Energy Forum in Algeria. Above, OPEC secretary-general Abdallah Salem el-Badri attends the group’s 169th last month. (Xinhua News Agency/REX/Shutterstock)

HOUSTON (ICIS)–NYMEX WTI crude futures for September delivery fell on Monday following seven consecutive positive sessions, settling at $47.05/bbl, down $1.47, on a profit-taking correction.

On contract expiration day, West Texas Intermediate (WTI), the US benchmark, established an intra-day low of $46.75/bbl, down $1.77, before attempting to rebound.

The dollar strengthened against a basket of currencies for the second session, making dollar-denominated commodities more expensive, as investors consider the possibility of an interest rate hike by the Federal Reserve in the coming months.

China was reported exporting large volume of refined products into the market in July in order to provide relief to a domestic glut but hitting global refining margins.

The market has also been factoring in Friday’s Baker Hughes drilling rigs report showing producers adding oil rigs for the eighth consecutive week, reinforcing concerns of more oil flowing into the market.

Crude futures had rallied close to $8.00/bbl on speculation that various OPEC producers, including Saudi Arabia, and non-OPEC Russia, will attempt to take action to freeze output following informal consultations during the International Energy Forum in Algeria in September.

The October WTI contract bottomed out at $47.35/bbl, down $1.76, and settled at $47.41/bbl, down $1.70.

ICE Brent for October delivery fell below the psychological $50.00/bbl barrier to establish a session low of $49.10/bbl, and settled at $49.16/bbl, down $1.72.

INSET IMAGE: Low angle view of a pump jack. (Design Pics Inc/REX/Shutterstock)