Crude oil futures plunged 8% on Tuesday to fall to their lowest levels in three months. The US summer driving season coming to an end and growing demand fears are weighing on prices during the holiday-shortened trading week. As more supply comes to global crude markets, could crude prices test in the next few months? October West Texas Intermediate (WTI) crude futures tumbled .85, or 7.17%, to .92 per barrel at 16:19 GMT on Tuesday on the New York Mercantile Exchange. US crude, which is trading at a three-month low, is coming off a 10% weekly loss, joining the broader market selloff from recent sessions. Year-to-date, oil is down about 40%. Brent, the international benchmark for oil prices, is testing the mark. November Brent crude futures declined .97, or 4.69%, to .04
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Crude oil futures plunged 8% on Tuesday to fall to their lowest levels in three months. The US summer driving season coming to an end and growing demand fears are weighing on prices during the
October West Texas Intermediate (WTI) crude futures tumbled $2.85, or 7.17%, to $36.92 per barrel at 16:19 GMT on Tuesday on the New York Mercantile Exchange. US crude, which is trading at a
Brent, the international benchmark for oil prices, is testing the $40 mark. November Brent crude futures declined $1.97, or 4.69%, to $40.04 per barrel on London’s ICE Futures exchange. Brent also suffered a 12% weekly loss last week, bringing its 2020 loss to around 39%.
A wide range of factors is contributing to the energy commodity’s bearish turn.
Saudi Arabia announced on Monday that it would be cutting its
The Saudis’ exports to the US also decreased to a 35-
In the US, driving season, which is between Memorial Day and Labor Day, has come to an end. This could lead to seasonal weakness in demand for gasoline. Also, in the US, drilling activity is trending upward, and the oil rig count has been rising incrementally. Other data indicate that oil and gas firms are restarting operations to take advantage of higher prices.
A recent Bank of America research note projected that it would take three years for crude demand to recover in the aftermath of the COVID-19 pandemic. That is if there is a vaccine or an effective treatment. This is in line with what a Russian government official recently said, predicting that the energy sector will not recover for another three years.
A strengthening greenback is also weighing on the crude market. The US Dollar Index, which measures the buck against a basket of currencies, extended its winning streak on Tuesday by advancing 0.6% to 93.28. The US dollar has staged a comeback over the last week, climbing 1%, which is bad news for commodities priced in dollars because it makes it more expensive for foreign investors to purchase.
In other energy commodities, November natural gas futures shed $0.116, or 4.48%, to $2.472 per million British thermal units (btu). October gasoline futures plummeted $0.759, or 6.45%, to $1.1013 a gallon. October heating oil futures fell $0.0667, or 5.79%, to $1.0848 per gallon.
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