Crude oil futures crashed as much as 4% in the middle of the trading week after the US government reported a smaller-than-expected drawdown in domestic inventories. The lackluster supply decline in the last week added to the concerns over the rising number of coronavirus cases, as well as tepid global demand-side fears. December West Texas Intermediate (WTI) crude oil futures plunged .72, or 4.12%, to .98 per barrel at 16:59 GMT on Wednesday on the New York Mercantile Exchange. US crude prices have been on a roller coaster ride over the last week, trading in the range of and . Year-to-date, WTI prices are down 34.68%. Brent, the international benchmark for oil prices, is also sliding midweek. December Brent crude futures tumbled .50, or 3.48%, to .66 a barrel on London’s
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Crude oil futures crashed as much as 4% in the middle of the trading week after the US government reported a
December West Texas Intermediate (WTI) crude oil futures plunged $1.72, or 4.12%, to $39.98 per barrel at 16:59 GMT on Wednesday on the New York Mercantile Exchange. US crude prices have been on a roller coaster ride over the last week, trading in the range of $39 and $42.
Brent, the international benchmark for oil prices, is also sliding midweek. December Brent crude futures tumbled $1.50, or 3.48%, to $41.66 a barrel on London’s ICE Futures exchange. Brent has also been experiencing volatility in the last week, topping $43 earlier this week. So far this year, Brent is down 37%.
According to the US Energy Information Administration (EIA), domestic crude stockpiles decreased by one million barrels for the week ending October 16. This represented the second consecutive week of a drawdown in US supplies, but it did fall short of the market forecast of 1.9 million barrels.
Oil inventories at the Cushing, Oklahoma storage facility increased by one million barrels. Gasoline supplies declined by 1.6 million barrels, while distillate stocks shed three million barrels.
Last week, the Baker Hughes oil rig count swelled past 200 for the first time since June. The oil rig count jumped from 193 to 205, bringing the total rig count to 282. Market observers are concerned that oil and gas firms might be restarting operations to take advantage of higher prices and regain market share.
Overall, investors are frightened by a global supply glut. Libya, which is exempt from the Organization of the Petroleum Exporting Countries’ (OPEC) production cuts, has been ramping up output and pumping more crude into an oversupplied market. Russia has stated that it is too early to consider additional output reduction beyond December. That said, OPEC and its allies, OPEC+, have signaled that they are willing to avoid relaxing the agreement of production cuts at 7.7 million barrels per day (bpd).
Earlier reports suggest that OPEC compliance is expected to prevent a further slide in crude prices.
In other energy commodities, November natural gas futures slid $0.114, or 3.91%, to $3.027 per million British thermal units (btu). November gasoline futures plummeted $0.0559, or 4.71%, to $1.1319 per gallon. November heating oil futures fell $0.0432, or 3.66%, to $1.137 a gallon.
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