CRUDE futures fell by more than US$1 a barrel on Wednesday in see-saw trading, with traders worried about demand in coming months as crude producers offered mixed signals about supply increases.
Brent crude futures settled down US$1.05, or 1.42 per cent, to US$72.70 a barrel. US West Texas Intermediate crude futures settled down US$1.14, or 1.62 per cent, at US$69.20.
During the session, both benchmarks swung from US$1 down to US$1 up following news Opec+ was discussing delaying a possible output increase because Libyan production is expected to rise.
In a broader sell-off, Brent crude futures tumbled as much as 11 per cent, or about US$9, in a little over a week, hitting a low of US$72.63 on Wednesday.
Lackluster data from the US and China reinforced expectations of a weaker global economy and oil demand, helping set off a broader decline in world markets.
“It’s definitely worries about a slowdown in manufacturing,” said Phil Flynn, senior analyst at Price Futures Group. “That’s the only negative we’re seeing.”
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Meanwhile, traders believed there could be an end in sight to a dispute halting Libyan oil exports, which would bring more crude supply back online.
“This sell off moved the attention to what Opec+’s response would be, which last week looked set to start the planned output hikes in October,” wrote Alex Hodes, analyst at StoneX. “The group is now concerned about pricing and sources say that a delay to the hikes is now being discussed.”
Recent data releases fed concerns of weak demand from China, the world’s biggest crude importer, and US consumption taking a hit.
On Saturday, Chinese data showed manufacturing activity sank to a six-month low in August, when growth in new home prices slowed.
On Tuesday in the US, the Institute for Supply Management data showed manufacturing remained subdued.
Weekly US oil inventory data was delayed by Monday’s Labor Day holiday. The report from the American Petroleum Institute is due at 4.30 pm EDT (2030 GMT) on Wednesday and data from the US Energy Information Administration will be published at 11.00 am EDT (1500 GMT) on Thursday.
US crude and petrol stockpiles were expected to have fallen last week, a preliminary Reuters poll showed.
While traders were pessimistic on demand fears, changes in supply could easily change sentiments, Flynn said.
“We could flip on a dime,” he said. “It could very easily turn positive. We could see a pretty decent crude draw later today.” REUTERS
