Crude oil futures fell 5% on Thursday as concerns over supply shortage eased amid rising inventories and fears of a recession in the global economy.
On Thursday, West Texas Intermediate (CL=F) crude oil futures fell more than 5.5% to north of $72 a barrel. Brent (BZ=F) crude oil, the international benchmark price, fell by almost the same amount to below $77.
Over the past month, WTI crude oil has fallen by more than 16%, while the price of Brent crude has fallen by more than 14%.
Current oil prices are about 22% below 2023 highs reached at the end of September as demand concerns grow amid fears of a global economic recession. Oil prices are on pace to decline for the fourth consecutive week.
On Wednesday, US stockpiles in Cushing, Oklahoma – which is used as a benchmark in determining WTI oil pricing – showed that stockpiles increased by 3.6 million barrels last week, more than double the expectation of a build of 1.2 million barrels. is also more.
“Oil production surveys for October are showing rising OPEC+ production volumes and falling prices with higher inventories in the United States and concerns over demand,” said Andy Lipo, president of Lipo Oil Associates.
“When the market broke above $78, selling intensified as programmed trading began.”
Dennis Kisler, senior vice president at BOK Financial, also noted the decline’s technical setup around the 200-day moving average, which currently sits just north of $78 a barrel.
“Technically, [December] “With crude futures battling the 200-day moving average which is a key technical support area, a weekly close below would likely lead to more selling,” Kisler said.
An aerial view of a crude oil storage facility in Cushing, Oklahoma, seen on May 5, 2020. (Photo by Johannes Eisele/AFP via Getty Images) (Johannes Eisele via Getty Images)
On Monday, the world’s major oil producers bucked bearish sentiment in crude markets. “Fundamentals remain strong despite exaggerated negative sentiment,” OPEC’s latest monthly oil report said.
The OPEC meeting is scheduled to be held on 26 November.
The organization’s current production cuts, aimed at restricting supply and maintaining control over oil prices, are set to last until 2024.
Additionally, Saudi Arabia has imposed a unilateral cut of one million barrels per day until the end of the year, while Russia also has a supply ban in place during the same period.
Ines Ferre is a senior business reporter at Yahoo Finance. Follow him on Twitter @ines_ferrre,
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