Oil skims one-month low
london — Oil fell for a second day on Monday, nearing its lowest in a month, as rising US output and a weaker physical market added to the pressure from a widespread decline across equities and commodities.
Friday’s US jobs report that showed the fastest wage growth in nearly nine years exacerbated a broader market sell-off that was already underway as Wall Street stocks backed off record highs, and a rising dollar dented commodities.
Brent crude futures were down 36 cents at $68.22 a barrel by 1010 GMT, while US West Texas Intermediate (WTI) crude fell 13 cents to $65.32.
“Oil is caught up in this general risk-off move, not helped at the margins by a little bit of strength in the US dollar,” said Ric Spooner, chief market analyst at CMC Markets in Sydney.
The S&P 500 saw its largest oneday fall since September 2016 on Friday, but is still up 3 per cent since the start of this year and up 21 per cent since February 2017, having hit a record high in late January.
The physical crude market has deteriorated in the last few weeks, as the price of North Sea oil has hit its lowest in eight months, while Russian Urals crude changed hands last week at its lowest in a year.
“We’re really going into a period of a lot of refining maintenance, so it’s not unexpected that [the selloff] is happening,” Petromatrix strategist Olivier Jakob said.
Saudi Arabia over the weekend said it had cut the official selling prices for its crude to European customers, a sign that the world’s largest oil exporter may be warding off potential weakness in the region. Adding to the pressure on oil, which hit its highest in nearly three years two weeks ago, has been evidence of rising US crude production, which could threaten the Organisation of the Petroleum Exporting Countries’ effort to support prices.
Data from the US government last week showed that output climbed above 10 million barrels per day in November for the first time since 1970.