Oil…oil…oil…Everywhere Oil Gushing Out Of The Ground

Oil… oil everywhere oil. The world is awash in black gold as producers fight for market share as global economies suffer from the drop in prices.  WTI crude oil dipped 11 cents to trade at 77.07 while Brent oil added 27 points after falling hard on Wednesday. Brent oil is holding at 80.85. Crude oil prices have fallen as traders calculated that OPEC would not reduce production to counter a global oil supply glut at this month’s meeting. The 12-nation Organisation of the Petroleum Exporting Countries, in its monthly oil market report on Wednesday, said its crude price basket fell 11.3 per cent from September to an average 85.06 barrel in October, a four-year low, “on concerns about the pace of global economic growth”. Yesterday, Saudi Arabia’s oil minister rejected talk that the OPEC kingpin was leading a price war in global oil markets as crude prices continue to sink.

Last week, Riyadh sent global oil prices tumbling when it cut its prices for crude for the US market while raising them for Asia, the country’s major outlet. Analysts guessed that the country wanted to strengthen its market share in the US against a flood of domestic oil from shale deposits. On Tuesday, the oil minister of Iran, which hopes for an OPEC output cut to boost prices, met Kuwait’s emir as part of a tour ahead of a Nov. 27 meeting of the producer group. Kuwait’s oil minister has said an output cut is unlikely.

Crude oil prices declined on both sides of the Atlantic with Brent and WTI falling by 0.6 percent and 1 percent respectively. The pressure was on account of technical selling, pressure from a strong dollar and after Saudi Arabia’s oil minister refused to say if the kingdom will support calls from some OPEC members to cut crude output.

The American Petroleum Institute reported that WTI crude inventories shrank by 1.5 million barrels last week. Today after a one day delay, the U.S. government’s Energy Information Administration will issue the official weekly inventory data. Crude stocks are expected to rise by 800,000 barrels on average last week. Stocks of distillates, which include heating oil and diesel fuel, were seen down 1.3 million barrels last week. Gasoline stocks were expected to have increased 500,000 barrels.

Also in the energy markets natural gas continued its decline to trade at 4.144 easing down 13 points as the cold winter storms did not materialize as forecast. U.S. natural gas futures lost 0.77 percent on Wednesday, down for a third day in a row, on forecasts for moderating weather in about two weeks after a cold blast blows through the Midwest and Northeast over the next week or so.