Oil down over 3% in 2 days, shredding ‘war premium’ as Saudis assure supply
Investing.com — Saudi Arabia is truly “balancing” the oil market by preparing to ship full volumes required by its North Asian customers, notwithstanding its output cuts — an act that’s costing it in price-per-barrel.
Crude prices fell almost 3% on Wednesday, hanging on to just little of Monday’s 4% surge that came on the back of supply seizure fears related to the latest fighting in the Middle East.
New York-traded West Texas Intermediate, or WTI, crude for delivery in November settled down $2.48, or 2.9%, at $83.49 per barrel, after hitting a session low of $83.14. The drop adds to Tuesday’s 0.5% decline in the US crude benchmark.
“Going into the new trading day, moving below $82.35 would increase the bearish bias with the next support (being) at the low (of) last week, at $81.56,” markets’ analyst Greg Michalowski said in a posting on the ForexLive forum.
London-traded Brent crude for the most-active December contract settled down $1.83, or 2.1%, at $86.48 after an intraday bottom of $85.23. The global crude benchmark finished the previous session down 0.6%.
The market had been on weak footing since Tuesday on signs it may have run up too much, too fast without proof that the counterstrikes between Israeli and Palestine forces — ignited by Saturday’s initial attacks carried out by Palestine militant group Hamas — will materially impact oil shipped from the region.
While producer group OPEC+ had been quick to assure that its output cuts would continue — with Saudi Energy Minister Abdulaziz bin Salman making that pledge on Sunday itself and Russian President Vladimir Putin reinforcing it on Wednesday — traders remained unconvinced of the need to send crude prices any higher.
Their resolve was strengthened after
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