Crude oil prices dwindled lower at the mid-week trading session. The losses are coming on fears for soft fuel demand and a potential concern that the energy market seems to be heading to saturation point. However, hopes that the oil cartel group will delay a planned increase in oil output curbed deeper losses.
- At the time of writing this report Brent crude futures traded at around $43.61/barrel, losing about 0.3%.
- U.S. West Texas Intermediate crude lost about 0.6%, to trade at $41.18 a barrel.
The major macro attributed to significant sell-offs seen at the energy market include data retrieved from the American Petroleum Institute (API) showing U.S. crude inventories gained 4.2 million barrels last week, well above oil experts forecasts in a Reuters poll for a build of 1.7 million barrels.
What they are saying
Stephen Innes, Chief Global Market Strategist at Axi, in a note to Nairametrics, elaborated on the fundamentals weighing on oil prices at the moment.
“While OPEC+ can extend the current cuts at its next full meeting on Nov. 30, it may well be viewed as a disappointment that we did not hear something more explicit today, especially in the context of a market that, on the margin, is still hopeful that additional cuts in 2021 will be at least put on the table.
“Oil had that sinking feeling again after the API reported an unexpectedly larger inventory build than anticipated. With the market focusing on the ultimate inventory fixer, OPEC+ month-end meeting, the post API sell-off was muted even when considering the slight disappointment from zero forward guidance from the JMMC.”
Oil markets have leaked a bit lower in line with general risk sentiment. However, markets are no worse for the wares as yesterday’s bounce on Moderna’s vaccine is still providing a favorable tailwind along the curve.