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Adverse Fundamentals Make Crude Oil Fall About 2%

Summary:
Futures for crude oil dropped about 2% today due to a range of factors. While the news that the United States downed Iranian drone should have been supportive of the commodity, markets paid more attention to the reports that US President Donald Trump sent Republican Senator Rand Paul to Tehran to find a peaceful solution to the US-Iran conflict. The International Energy Agency revised down its forecast for oil demand growth in 2019 due to the slowing global economic growth. Russia’s oil production recovered to the levels agreed under the OPEC+ output cut deal after falling below for a while. Supply from the USA should recover too as production in the Gulf of Mexico was returning to norm after Hurricane Barry has passed. Yesterday, the Energy Information Administration released a report

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Futures for crude oil dropped about 2% today due to a range of factors. While the news that the United States downed Iranian drone should have been supportive of the commodity, markets paid more attention to the reports that US President Donald Trump sent Republican Senator Rand Paul to Tehran to find a peaceful solution to the US-Iran conflict. The International Energy Agency revised down its forecast for oil demand growth in 2019 due to the slowing global economic growth. Russia’s oil production recovered to the levels agreed under the OPEC+ output cut deal after falling below for a while. Supply from the USA should recover too as production in the Gulf of Mexico was returning to norm after Hurricane Barry has passed.

Yesterday, the Energy Information Administration released a report on US crude oil inventories. It showed that the stockpiles fell by 3.1 million to 455.9 million barrels last week. The actual decrease was smaller than a 3.6 million barrel drop predicted by analysts.

Futures for delivery of WTI crude oil in August declined as much as 1.94% to $55.68 per barrel as of 21:00 GMT on NYMEX today. September contract for Brent crude dropped 1.76% to $62.54 per barrel on ICE.


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Vladimir Vyun
Vladimir is an online journalist with background in computer science and work experience in pension funds. He contributes news reports, fundamental analysis and sentiment forecasts to TopForexNews.com and CommodityBlog.com. His main specialization is the currencies of emerging economies and inter-market correlations with commodity and bond trading.

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