One might expect the market to be nervous ahead of the impending U.S. sanctions on Iran, but the oil price dipped this week. These numbers are in line with seasonal trends; oil inventories typically rise as refineries re-tool for winter product blends.
Yet over the past 20 trading sessions, oil and stocks both peaked in early October and both have lost almost 10 percent through the end of the month.
The International Energy Agency on Tuesday said that high oil prices were hurting consumers and could dent fuel demand at a time of slowing global economic activity.
In a bearish signal, the American Petroleum Institute reported USA crude inventories rose 5.7 million barrels last week, more than analyst forecasts for a 4.1 million barrel build.
Crude oil futures were linked primarily to the sell-off in global equity markets in October, sinking as investors sold risk assets.
Brent, against which Nigeria's oil is priced, had early this month hit a new four-year high of $86.74 per barrel, fuelled by concerns about a shortfall in global supply as United States sanctions whittle away at Iranian crude exports. A stronger US dollar is also buffeting oil, Kilduff said. However, expectation of a trade deal between the USA and China have eased global tensions and restricted the fall in global prices of the fuel.More news: Oil seesaws on reported Iran sanction waivers, US-China trade hopes
Adequate oil supply and an uncertain global economic outlook also dampened sentiment.
The Permian region, which is located in western Texas and eastern New Mexico, accounts for about 63% of total Texas crude oil production and 95% of total New Mexico crude oil production.
"The strong built in oil inventories is likely to keep downward pressure on oil prices", ANZ Research analysts said in a note.
New Delhi, Nov 2 Crude oil futures fell 0.31 per cent to Rs 4,644 per barrel, in line with a weak trend in Asian trade, as speculators cut down their bets. WTI picked up 0.26 dollar to settle at 67.59 dollars a barrel. The US government and OPEC are doing their part to try to cool oil prices ahead of US sanctions on Iran and yesterday they had some success. This is where the market bottomed in August, in June and back in the spring.
"I think there might be another spike left in crude still".