Oil down 2nd day in row, poised for huge October loss
Investing.com — Crude prices fell hard for a second day in a row and looked poised to end October with double-digit losses as oil bulls who rushed to hedge against the Israel-Hamas war discovered to their disappointment that the rest of the market wasn’t prepared to assign a war risk premium to a trade simply unaffected by the conflict.
Weaker-than-anticipated factory activity in top crude importer China added to the gloom of the market.
New York-traded West Texas Intermediate, or WTI, crude for December delivery, settled at $81.02 per barrel, down $1.29, or 1.6% on the day, adding to Monday’s 3.8% slump.
Aside from its more than 5% drop on the week, the US crude benchmark looked likely to finish the current month down as much as 11%. That would be its worst performance since May, just before the announcement of Saudi-Russian production cuts that led to four straight months of rally in oil.
UK-origin Brent crude’s most-active January contract was at $85.16, down $1.19, or 1.4%, by 15:00 Eastern US Time (19:00 Greenwich Mean Time). Brent was also down almost 11% on the month in what appeared to be its worst month since August 2022.
After last week’s stumble, oil began this week deeper in the red as traders looked beyond the war in the Middle East to concerns over what the Federal Reserve could do at its interest rate decision on Wednesday.
“It is interesting crude prices have given up the bulk of their gains since Hamas attacked Israel which suggests either the geopolitical risk-premium has sharply reduced or global economic concerns have increased, perhaps a combination of the two,” said Craig Erlam, analyst at online trading platform OANDA.
The Fed is expected to hold interest rates unchanged after 11 hikes between
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