|
Brent futures were down 23 cents at $80.95 a barrel by 1101 GMT.
U.S. West Texas Intermediate crude (WTI) shed 27 cents to
$76.39. Both benchmarks fell more than 1.5% in the previous
session.
WTI's front-month contract also traded below the price for the
second month, a structure known as contango, suggesting that
investors expect prices to increase. The front month's discount
to the second month traded at minus 17 cents on Thursday.
"Clearly, the decline in crude oil prices and the weakening of
the structure is an ominous sign; one that implies an
oversupplied physical market," said Tamas Varga of oil broker
PVM.
Worries have been amplified by the U.S. crude stocks that the
U.S. Energy Information Administration (EIA) said rose by 3.6
million barrels last week to 421.9 million barrels, far
exceeding analysts' expectations in a Reuters poll. [EIA/S]
U.S. crude production held steady at a record 13.2 million
barrels per day (bpd).
Varga said the fall in crude prices flies in the face of recent
estimates of global demand-supply fundamentals from OPEC and the
International Energy Agency (IEA), both of which predicted
supply tightness in the fourth quarter.
Meanwhile, October inflation data from major economic hubs
including the euro zone, the United States and the UK have also
been encouraging, he added.
Even China, where the property sector remains in trouble, is
seeing green shoots of economic recovery. Its economic activity
perked up in October as industrial output increased at a faster
pace and retail sales growth beat expectations.
"The current price drop is taking place amid a seemingly
auspicious backdrop, which suggests that investors simply do not
buy into the ‘Q4 stock draw’ narrative; something that is not
backed up by the recent weekly EIA reports either," said Varga.
One of the factors likely to be spooking investors is an
expected slowdown in Chinese oil refinery throughput. Runs eased
in October from the previous month's highs as industrial fuel
demand weakened and refining margins narrowed.
(Reporting by Natalie Grover, Stephanie Kelly and Andrew
HayleyEditing by David Goodman)
[© 2023 Thomson Reuters. All rights
reserved.]
This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|
