Oil Tumbles After Supply Concerns Dissipate

West Texas Intermediate crude fell below $100 a barrel and Brent tumbled to a three-month low as supply-disruption concerns eased with Libyan output gains and as Iraqi shipments are unaffected by an insurgency.

Libya is seeking to boost oil exports after two ports reopened and Iraqi lawmakers today elected a speaker of parliament. U.S. crude output rose to the highest since 1986 in the week ended July 4, and further gains are likely as benign summer weather is expected to increase pumping from North Dakota, the second-largest oil-producing state.

“The market may have a hard time handling the surge in Libyan oil production,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said by phone. “In a very short time the market has moved from concerns about insufficient supply to what may turn into an oversupply situation.”

WTI for August delivery fell $1.15, or 1.1 percent, to $99.76 a barrel at 9:30 a.m. on the New York Mercantile Exchange. Futures touched $99.60, the lowest since May 6. The volume of all futures traded was 85 percent above the 100-day average for the time of day. Prices have advanced 1.4 percent this year.

Brent for August settlement dropped $1.61, or 1.5 percent, to $105.37 a barrel on the London-based ICE Futures Europe exchange. It reached $105.15, the lowest level since April 7. The contract expires tomorrow. The more-active September futures slipped $1.30, or 1.2 percent, to $106.41.

The European benchmark crude traded at a $5.60 premium to WTI, down from $6.07 yesterday

via Bloomberg

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza