Crude oil futures settled lower on Wednesday, extending losses from the previous session, as Saudi Arabia’s pledge to help stabilise the market outweighed concerns about supply disruptions amid the tensions in the Middle East.
A report from Reuters said oil firm Saudi Aramco told at least four refiners in North Asia that it would supply them with the full contractual volumes nominated for November.
West Texas Intermediate Crude oil futures for November settled at $83.49 a barrel, down $2.48 or about 2.9%.
Brent crude futures settled lower by $1.83 or about 2.1% at $86.48 a barrel.
The Energy Information Administration (EIA) said in a monthly report today that global oil inventories will likely fall by 200,000 bpd in the second half of 2023 due to voluntary output cuts from Saudi Arabia and reduced production among OPEC+ countries.
The EIA report also said crude output in the U.S. is set to rise by 1.01 million bpd to 12.92 million bpd in 2023, and by 200,000 bpd to 13.12 million bpd in 2024.
Total U.S. petroleum consumption is expected to increase by 100,000 bpd to 20.1 million bpd in 2023, and by 100,000 bpd to 20.2 million bpd in 2024.
“Crude prices are lower after a mountain of geopolitical risk to start the trading week didn’t yield any real changes in crude output and transit. The only thing that is becoming clear for energy traders is that the road for the global growth recovery is getting rockier,” says Edward Moya, Senior Market Analyst at OANDA.
“The German economy has too many headwinds and the risks of a global energy crisis could trigger a severe recession. China’s piecemeal stimulus might not be enough, especially after disappointing travel and spending data from the Golden Week holiday,” Moya adds.