Oil Drops as Saudi Arabia Pledges More Supply

Oil is trading lower on Tuesday. West Texas Intermediate lost 4.56 percent as the Saudi Arabia investment conference drew to a close. Energy prices recorded a the biggest daily loss in three months as rising global growth concerns hit stock markets and demand for crude going forward.


West Texas Intermediate graph

Saudi Arabia has pledge it will increase production to keep prices stable and concerns of negative backlash following the killing of journalist Jamal Khashoggi have eased.

US sanctions against Iranian exports are providing some support but downward pressure has been more persistent. The release of the US weekly crude inventories published by the Energy Information Administration (EIA) on Wednesday could tip the balance, although the market has been pricing in a drawdown due to minor weather disruptions.


West Texas Intermediate graph

Geopolitics directly affecting the supply of oil was a big factor in October, but it now seems Saudi Arabia will increase production as much as possible sending energy prices lower.

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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