Crude Oil Falls on Russia-Saudi Output Deal | Gulf Coast Oil Rig Equipment & Repair
The phrase “four-year high” has been used quite often recently to describe crude oil prices, which have taken on a generally bullish trend.
The phrase didn’t apply on Thursday.
November West Texas Intermediate (WTI) crude oil futures declined by nearly 3 percent to settle at $74.33 a barrel, losing $2.08 for the session. The benchmark fluctuated between $73.88 and $76.47.
The front-month Brent contract also lost ground, falling $1.71 to settle at $84.58.
“The main driver today is the agreement by Saudi Arabia and Russia to increase oil rig flanges gulf coast production to make up for the decline in Iranian oil rig flanges gulf coast production as sanctions take effect,” said Jason Feer, global head of business intelligence with Poten & Partners. “Statements by OPEC that other members also plan to increase output has contributed as well.”
Feer added that concerns about the possible impact of higher interest rates on global economic growth influenced crude oil benchmarks Thursday.
“This plays into lingering concerns that slowing economic growth in China could affect global demand,” Feer explained.
The price of a gallon of reformulated gasoline (RFG) for November delivery also ended the Thursday session lower but at a more modest rate than the WTI and Brent. RFG slipped 4 cents to settle at $2.10.
“It is notable that RFG prices have not declined as sharply as crude prices,” Feer observed. “This says to me that oil prices are driven by global concerns today and that U.S. demand is expected to hold up.”
Henry Hub natural gas futures did not escape Thursday’s bearish sentiment. The November contract price fell 6.5 cents to settle at $3.165.