Crude oil sold off, price hits 4-month low

On November 16, crude oil prices fell 6% at one point, to their lowest level since July, due to concerns about oversupply.

At the close of trading on November 16, Brent crude oil prices fell 4.6% to $77.42 a barrel. US crude oil fell 4.9% to $72.9.

During the session, the prices of both types of oil at one point lost nearly 6%, to 76.6 USD and 72.16 USD respectively. This is the lowest level in 4 months. Currently, the prices are still fluctuating around yesterday's closing level.

Analysts say oil prices have fallen due to concerns about oversupply and weak demand, especially in China. US crude inventories rose by 3.6 million barrels last week, according to data released on November 15, far exceeding analysts’ forecasts.

Oil futures are also higher than spot prices, "putting the market under downward pressure," Robert Yawger, vice president of energy at Mizuho Securities, told CNN . He said refiners in China are cutting production, indicating weak demand.

In addition, the Israel-Hamas conflict has not caused disruptions to regional supply as initially feared. "The risks from the Middle East have not materialized yet," said Patrick De Haan, Director of Petroleum Analysis at GasBuddy.

The sharp sell-off in crude oil is considered a positive development for inflation, in the context of fuel demand forecast to increase at the end of the year. This development is in contrast to 2 months ago, when oil prices were expected to exceed 100 USD per barrel due to the supply tightening by the Organization of the Petroleum Exporting Countries and its allies (OPEC+). Compared to the end of September, US crude oil is now down 23%.

"Sentiment is negative. Charts are negative. It will take a while for that to change. Until then, prices will continue to go down," Phil Flynn, an analyst at Price Futures Group, told Reuters.

Ha Thu (according to Reuters, CNN)

Source link