Oil down 4% in biggest loss since June; Gasoline stock build hijacks OPEC show
Investing.com — The oil trade seems to have woken up to the fact that there’s something bigger after all than OPEC: The economy.
Crude prices fell more than 4% a barrel on Wednesday, a drop that if maintained to the day’s settlement, would account for the biggest one-day sell-off since June.
New York-traded West Texas Intermediate, or WTI, crude for delivery in November traded was down $3.84, or 4.3%, at $85.39 per barrel by 12:17 ET (16:17 GMT). The US crude benchmark hit a one-month low of $85.03 earlier and was down more than 6% for the week.
“Sustainability below $88.50 will favor an extended correction in WTI towards $84.25,” said Sunil Kumar Dixit, chief technical strategist at SKCharting.com.
London-traded Brent for the most-active December contract was down $3.84, or 4.2%, to $87.08, after a one-month low at $86.78. The global crude benchmark was down almost 9% on the week.
Wednesday’s collapse in oil prices came amid several drivers.
The primary one was concern about the health of the global economy, particularly Europe’s most vulnerable versus the relatively resilient US economy.
But the United States has its own problems too with the energy-price driven inflation of the past three months prodding the Federal Reserve to stay hawkish on interest rates for the foreseeable future. That has pushed the dollar to 11-month highs, further weakening the finances of other nations and international demand for crude and other commodities denominated in the US currency.
The other driver for Wednesday’s spectacular price drop in crude was the seasonal slide in U.S. demand — a fact that seemed lost on those betting on the oil rally of the past quarter to continue indefinitely on OPEC market manipulation and promises.
“
Read more on investing.com
