Oil drops as wave of supply meets global economic gloom

Oil drops as wave of supply meets global economic gloom

Hedge funds are still overwhelmingly long on oil and may have to liquidate positions if prices keep falling, accelerating a market sell-off, analysts say. US President Trump has made various comments suggesting that OPEC should up its output quotas and help lower the price of oil. This has seen what was once a near-20% gain taken back down into the single digits.

Analysts said oil prices were also supported by the upcoming USA sanctions against Iran's crude exports that will start on November 4. The December contract price settled at $3.19, reflecting a one-cent drop. In 2017, the country consumed more than 19 million barrels of crude oil every day.

Investors awaited industry data on USA crude inventories, due to be released at 4:30 p.m. EDT on Tuesday.

OPEC managed to hike output in September even as production from Iran and Venezuela fell.

While comments from Saudi Arabian Energy Minister Khalid Al-Falih pledged to play responsible role in energy market and announced possible partnership with Russian Federation easing investors worries about Saudi cutting Crude supply in retaliation to United States intervention in matters relating to death of Journalist Khashoggi, oil market saw bearish pressure post comments from Saudi Arabia's OPEC Governor who said that slower global growth could mean lower demand for crude oil and market could face oversupply in current quarter.

Right now, however, oil prices look set to continue moving lower, until any fresh developments alter that course. This is the first time that monthly US production levels surpassed 11 million b/d.

Eurozone inflation, which has always been missing in action, climbed to 2.2% in October from 1.3% in January.

Venice hit by high tide as Italy buffeted by winds; 6 killed
A total of nine people have died in violent storms that have been battering the country since the weekend, Reuters reports. The historical Saint Mark's Basilica was also damaged due to flooding as parts of the cathedral were submerged.

The local CAIXIN index saw a slight rise in activity.

Besides, profit-booking by participants weighed, they added.

Petoro AS, the company that manages the Norwegian government's massive stake in the country's oil and gas fields, is warning that the industry's costs could be rising for the first time since crude's collapse in 2014. They doubled that bet on Thursday. Now trade is carried out by the exchange's two divisions, the NYMEX Division and the COMEX Division, the first one designed for trades of oil, gas, platinum, palladium, ethanol, coal, electricity and carbon dioxide emissions, the second one for gold, silver, copper and aluminum.

"This surge has driven the market into oversupply", Jefferies said.

The administration official told Bloomberg that waivers were aimed at preventing oil price hikes and would be granted in exchange for continued import cuts.

Oil prices were down in afternoon trading prior to the release of the API data on inventories as traders feared additional inventory increases.

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