Oil prices dropped more than $3 a barrel on Thursday, November 16, extending losses from the previous session, as investors responded to signals of higher supply in the US and expectations of weak energy demand in China.
Brent futures fell $2.60, or 3.2 per cent, to $78.58 a barrel. US West Texas Intermediate crude (WTI) shed $2.65, roughly 3.5 per cent, to $74.01. Both benchmarks dropped by more than 1.5 per cent in the previous session, according to news agency Reuters.
Back home, on the Multi Commodity Exchange (MCX), crude oil futures due for a November 17 expiry, was last trading lower by 5.18 per cent at ₹6,091 per bbl, having swung between ₹6,039 and ₹6,378 per bbl during the session so far, against a previous close of ₹6,424 per barrel.
OPEC and the International Energy Agency (IEA) have both predicted supply tightness in the fourth quarter, but U.S. data on Wednesday showed inventories were abundant.
The U.S. government Energy Information Administration said U.S. crude stocks rose by 3.6 million barrels last week to 421.9 million barrels, far exceeding analysts’ expectations in a Reuters poll.
U.S. crude production held steady at a record 13.2 million barrels per day (bpd).
Chinese economic activity also rallied in October as industrial output increased at a faster pace and retail sales growth beat expectations.
One of the factors giving investors pause is an expected slowdown in Chinese oil refinery throughput. Runs eased in October from the previous month’s highs as industrial fuel demand weakened and refining margins narrowed.
As the Israel-Hamas conflict appeared to be escalating in Gaza, U.S. officials on Wednesday said they would enforce oil sanctions against Iran, which has long been a backer of Hamas.
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Updated: 16 Nov 2023, 10:31 PM IST