HOUSTON (ICIS)--NYMEX WTI crude futures for November delivery settled at $70.97/bbl, down $2.20 on Thursday, in response to the weekly supply statistics from the Energy Information Administration (EIA) showing the third consecutive build in oil inventories. A substantial build at the inland Cushing, Oklahoma NYMEX delivery hub added to the bearish report.
Also weighing on the energy complex, global stock markets extended recent losses in response to the lack of investor confidence and expectations of more interest rate hikes from the US Federal Reserve.
In its monthly report, OPEC contributed to the bearish mood by reducing its forecast for global demand growth in 2019.
The market is still factoring in crude export losses in Iran as a result of Washington’s sanctions but the full impact will not be determined until after early November when the imposed sanctions take full effect.
US producers are beginning to restore operations in the Gulf of Mexico after oil and gas installations were evacuated ahead of Hurricane Michael that slammed in the Florida Panhandle. About 42 percent of oil production was shut-in
The November West Texas Intermediate (WTI) contract established a session low of $70.89/bbl, down $2.28, and extending the losses to $70.51/bbl in electronic trading afterwards.
December ICE Brent bottomed out at $80.20/bbl, and settled just off the bottom of the range at $80.26/bbl, down $2.83. Afterwards, the North Sea benchmark hit $79.80/bbl before attempting to rebound.
Both benchmarks are now approaching oversold territory and are in need of a correction.