Investing.com – The machines are in control of the oil market, with real-life traders already in holiday mood, pushing prices toward the bears’ long-desired technical target of under $48 a barrel.
U.S. West Texas Intermediate oil is down almost 40% from four-year highs struck in early October, a phenomenal drop of nearly $30 a barrel in 10 weeks as worries about a potential global recession pile on top of a glut feared in crude supply.
U.S. crude was down $2.48, or 5%, to $47.72 per barrel by 12:19 PM ET (17:19 GMT), after plumbing an October 2017 low of $47.28 earlier.
U.K. , the global oil benchmark, was down $2.27, or 4%, to $57.34 per barrel. The session low was $56.87.
No matter how positive a piece of data or market development, be it a drawdown in U.S. inventories or force majeure in Libya, the selloff has continued, albeit with a brief rise or pause.
Even Wall Street’s rebound from the previous day’s plunge didn’t help in Tuesday’s trade. WTI remained in freefall mode amid the growing notion that algorithms, more than people, were deciding trades as each technical support barrier is broken.
“I still see a lack of willing buyer in the market overall , which is probably the larger issue as the algos smell that out and continue to generate weakness to stop out even the smallest of longs,” Scott Shelton, a Durham, N.C. based analyst and broker for ICAP (LON:) said in his daily note.
“The market is piling on the pain, though whom is left from the long side after two months is a mystery to me.”
The slide was despite analysts’ projections of a third-straight weekly decline in U.S. crude stockpiles last week, with the latest deficit seen at 2.5 million barrels.
A surfeit of both positive and negative news flooded the market, making it harder to discern a bullish case for oil, if anything.
Libya’s National Oil Company (NOC) declared force majeure on operations at the country’s largest oilfield, El Sharara, a week after the firm announced a contractual waiver on exports from the field following its seizure by militants. At stake was 315,000-barrels-per-day (bpd) pumped by El Sharara and also 70,000 bpd pumped by the El Feel field located south of that.
Bloomberg reported that Russian Energy Minister Alexander Novak planned to meet with executives from local oil companies on Wednesday to discuss the OPEC+ deal and targets for a joint production cut of 1.2 million barrels per day over the next six months. Russia planned to cut 228,000 bpd within the first quarter, it said.
Offsetting any positive sentiment from that was a monthly report by the U.S. Energy Information Administration which said oil production from the seven major U.S. shale basins was expected to surpass 8 million barrels bpd by the end of the year. The United States is already the world’s largest crude producer with 11.7 million bpd.
Saudi Arabia’s own crude exports in October rose to 7.7 million barrels per day from 7.433 million bpd in September, official data showed on Tuesday.
Source: Investing.com
