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Crude Oil Dives 6% To Fresh One-Year Low As Stock Market Slides

  • Crude Oil price fall amid concerns about rising global supplies and growing fears of an economic slowdown stock Market.
  • OPEC and its allies are set to meet on Dec. 6 to discuss supply cuts.
  • The head of the International Energy Agency warns the oil market is "entering an unprecedented period of uncertainty."

                     Oil prices plummeted, snapping four days of profits and renewing a sale that plunged crude futures into the bear market. The renewed sale in the energy complex took place in the stock market with a sharp reversal. On Tuesday, the Dow Jones Industrial Average fell by over 550 points. Crude futures and equities collapsed during a wide-ranging market sale, which saw investors dumping risk assets last month. Commodity watchers are increasingly worried that supply will outnumber demand next year, leading to another outbreak. Brent crude, the international oil price benchmark, fell by $3.27 or 4.9 percent to $63.52 per barrel at 9:56 a.m. ET (GMT 1456). The United States Western Texas Intermediate (WTI) crude futures decreased to $53.73 per barrel by $3.47 or 6.1 per cent. The head of the IEA warned about the impact of geopolitical instability on prices. " We are entering an unprecedented period of oil market uncertainty, " said Fatih Birol at a conference in Norway. 

             Oil prices are about a quarter below their recent peaks at the beginning of October, weighed down by an increase in supplies, particularly from the United States, and a slowdown in global trade.                " The same old adage applies... too much supply, not sufficient demand, " said Matt Stanley, a StarFuels fuel broker in Dubai. The United States Nearly 25 percent of crude oil production this year soared to a record 11,7 million barrels per day (bpd). In the midst of uncertainty, financial traders were wary of the oil markets and saw further price downside risks from growth in the United States.

                    As well as deteriorating economic outlook, shale production. Portfolio managers have sold the equivalent of 553 million barrels of crude and fuel over the past seven weeks, the largest reduction since at least 2013 over a comparable period. Funds now have a net long-term position of only 547 million barrels, less than half the recent peak of 1,1 billion at the end of September and below the January record of 1,484 billion Concerned about an emerging production overhang similar to that which led to a price decrease in 2014, the Organization of Petroleum Exporting Countries (OPEC) is pushing for a 1 million to 1.4 million bpd reduction in supply.
            " We expect OPEC to accept a cut in supplies at its next official meeting on 6 December, " said BNP Paribas, a French bank. The bank added that Brent expects to recover to 80 dollars per barrel before the end of the year. " We expect WTI to have an average of $69 per barrel in 2019 and $76 per barrel in Brent, " said BNP. 
             On Monday, the International Energy Agency (IEA), which represents the interests of oil consumers, warned OPEC and other manufacturers of the " negative implications " of supply cuts, many analysts fearing that a rise in crude prices could erode use. 

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