Oil Falls After Warning Flags of Pullback Arise
by Bloomberg | Julia Fanzeres
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas
Oil prices dropped after a nine-session rally — driven by renewed production cuts from leaders of the OPEC+ alliance — propelled futures into overbought territory.
West Texas Intermediate settled below $87 a barrel after the longest stretch of gains since January 2019. That surge came as Saudi Arabia and Russia pledged to prolong their export curbs through the fourth quarter.
Now, crude faces headwinds from wider markets, with the dollar on track for an eighth consecutive week of gains. WTI was also trading in overbought territory, based on its relative strength index, leaving traders braced for a technical correction.
The OPEC+ cuts come at a time when US gasoline prices are at the highest seasonal level in a decade. Supplies of the motor fuel may not rebound soon as refiners enter their fall maintenance period, where diesel production is prioritized. A renewed gasoline price spike threatens to squeeze consumers and risks derailing central bankers’ efforts to tamp down inflation.
Meanwhile, US crude stockpiles and inventories at the Cushing, Oklahoma, hub dropped to the lowest levels since December. The signs of a stronger physical market are underscored by a robust curve structure.
“While some can argue that messaging from the kingdom earlier this week is a stark reminder to short sellers to not position against the Central Bank of oil, some may argue that the recent physical market tightness is artificial rather than organic market forces at work,” Royal Bank of Canada analysts including Michael Tran and Helima Croft said in a note, referencing Saudi Arabia.
Prices:
- WTI for October delivery slid 67 cents to settle at $86.87 a barrel in New York.
- Brent for November settlement fell 68 cents to settle at $89.92 a barrel.
by Bloomberg | Julia Fanzeres
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas