Crude oil prices sink 2% as Wall Street slides

Business World - - Front Page - Crude oil prices sink 2% as Wall Street slides

NEW YORK — Oil prices dropped 2% on Wed­nes­day as US eq­uity mar­kets broadly fell, even though en­ergy traders wor­ried about shrink­ing Ira­nian sup­ply from US sanc­tions and kept an eye on Hur­ri­cane Michael, which closed some US Gulf of Mex­ico oil out­put.

NEW YORK — Oil prices dropped 2% on Wed­nes­day as US eq­uity mar­kets broadly fell, even though en­ergy traders wor­ried about shrink­ing Ira­nian sup­ply from US sanc­tions and kept an eye on Hur­ri­cane Michael, which closed some US Gulf of Mex­ico oil out­put.

Brent crude fu­tures fell $1.91, or 2.3%, to set­tle at $83.09 a bar­rel. The global bench­mark posted a 1.3% gain on Tues­day.

US West Texas In­ter­me­di­ate (WTI) crude fu­tures fell $1.79 to set­tle at $73.17 a bar­rel, a 2.4% loss.

Oil prices ex­tended losses in post-set­tle­ment trade when in­dus­try group the Amer­i­can Petroleum In­sti­tute re­ported that crude in­ven­to­ries rose by 9.7 mil­lion bar­rels in the week to Oct. 5 to 410.7 mil­lion, more than four times the 2.6 mil­lion bar­rel build an­a­lysts had ex­pected.

The US En­ergy In­for­ma­tion Ad­min­is­tra­tion is due to re­lease of­fi­cial gov­ern­ment in­ven­tory data Thurs­day at 11 a.m. EDT.

Oil prices fell as US stock mar­kets skid­ded on Wed­nes­day, with the S&P500 stock in­dex mark­ing its big­gest one-day fall since Fe­bru­ary. Ris­ing US Trea­sury yields and trade pol­icy wor­ries sparked the sell-off on Wall Street.

Risks to the global fi­nan­cial sys­tem have risen over the past six months and could in­crease sharply if pres­sures in emerg­ing mar­kets es­ca­late or global trade re­la­tions de­te­ri­o­rate fur­ther, the In­ter­na­tional Mone­tary Fund (IMF) said.

On Tues­day, the IMF cut its global eco­nomic growth fore­casts for 2018 and 2019, rais­ing con­cerns that de­mand for oil may also slump.

Prices fell de­spite wor­ries about sup­ply as Hur­ri­cane Michael made land­fall in Florida. In the US Gulf of Mex­ico, pro­duc­ers have cut daily oil pro­duc­tion by roughly 42% due to the storm, the Bu­reau of Safety and En­vi­ron­men­tal En­force­ment said. The cuts rep­re­sent 718,877 bar­rels per day of oil pro­duc­tion.

While crude out­put has been cut be­cause of the hur­ri­cane, “down time is ex­pected to be brief and Gulf of Mex­ico out­put now ac­counts for a com­par­a­tively small por­tion of to­tal US pro­duc­tion,” Jim Rit­ter­busch, pres­i­dent of Rit­ter­busch and As­so­ci­ates, said in a note.

Wor­ries about crude sup­ply from the Mid­dle East have given prices some sup­port.

Iran’s crude ex­ports fell fur­ther in early Oc­to­ber as buy­ers sought al­ter­na­tives ahead of US sanc­tions that take ef­fect on Nov. 4, ac­cord­ing to tanker data and an in­dus­try source. —

Source: REUTERS

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