Oil fell yesterday, touching its lowest levels since June, due to rising concerns over weaker global demand and increased supply from the world’s major oil producers. With Russia pumping oil at a post-Soviet high, US crude output at more than 11mn bpd, concerns about renewed US sanctions on Iran have faded in recent days. A Wednesday Reuters survey of Opec production shows the group made up for declines in Iranian shipments in October by boosting production to its highest level since 2016.
Brent crude futures fell $1.57 a barrel to $73.47 a barrel as of 11.38am EST (1538 GMT), while US futures were down $1.40 a barrel at $63.91. Both benchmarks posted their biggest monthly percentage decline since July 2016 in October, with Brent down 8.8% for the month and US crude losing nearly 11%. “The sellers seem to be in charge,” said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut.The increase in Opec production “has really started to tamp down concerns surrounding the loss of Iranian barrels.” Brent and US futures have dropped on growing concern over a possible slowdown in global growth as the US-China trade dispute remains unresolved, and is starting to hit emerging market economies in particular. That will offset the decline in Iranian exports that could tighten supply.
China’s imports from Iran fell by 34% in September from the year-ago period, official Chinese customs data showed. US sanctions on Iran’s energy exports come into force on November 4 and it is still unclear how much the country’s roughly 3.8mn bpd production will affected. China’s manufacturing sector in October expanded at its weakest pace in over two years, hurt by slowing domestic and external demand, in a sign of deepening cracks in the economy from the trade war with the US.
Sources and photo-credits: Gulf Times, Reuters