Oil Prices Leap After 3 Days Of Sliding

Oil Prices Leap After 3 Days Of Sliding”

Russian Federation is pumping oil at a post-Soviet high, United States crude output has topped 11-million barrels per day (bpd) and a Reuters survey of oil cartel Opec production shows the group more than made up for any declines in Iranian shipments in October.

In the previous week ending October 19, WTI and Brent lost 3.7 percent and 1.2 percent, respectively, and WTI and Brent settled at 69.12 US dollars and 79.78 dollars per barrel, respectively, at the end of the week.

"More troubling... is the shift in structure towards contango", USA investment bank Jefferies said on Friday.

While there were reasons to be bearish on oil prices, Iranian sanctions could send oil prices higher, at least for the foreseeable future.

In a commodities update report from Capital Economics, the outlook for a stronger oil price was less than enthusiastic.

Prices for April 2019 delivery are around 20 cents above January.

"Positives remain in short supply for oil bulls as a softening demand backdrop continues to underpin selling pressures", said Stephen Brennock, analyst at brokerage PVM Oil.

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. Meanwhile, output from top producers Saudi Arabia, Russia and the United States - as well as from OPEC as a whole - has continued to rise.

"It's a real risk off, and the same things that are bedeviling the equity market are bedeviling the crude market", he said.

"Mounting perception of a weakening in global oil demand due to increasing tariff issues between the US and China, while extremely hard to measure, will be maintaining some negative influence in keeping would-be buyers sidelined", Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.

"Thus far, potential waivers appear targeted at India and South Korea, and they require some reductions over current import volumes while still allowing oil to flow", he said.

Trump said he would like to make a deal now but that China was not ready. Saudi Arabia was pumping at then-record levels, and USA drillers were adding rigs to American oil fields.

However, with last week's increase turning out to be less than expected, oil's fall was somewhat limited.

EIA also forecast WTI prices to increase at a slightly slower rate, leading to a widening of the Brent-WTI spread to 9 dollars per barrel in October.

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