Source: Houston Chronicle
Oil slid the most in two weeks after Saudi Arabia boosted crude output by more than a million barrels a day against the backdrop of renewed worldwide trade woes.
Futures fell as much as 2.5% in New York on Thursday. The Saudis lifted daily production to about 9.8 million barrels just weeks after crippling missile attacks on crucial installations, consultant JBC Energy said. That supply increase comes amid signs that Chinese officials are resisting some of U.S. President Donald Trump’s key trade demands.
Canadian drillers may also add crude supplies to the market after the government loosened output caps for companies that will ship Albertan oil via railroad.
“We have to keep an eye on the trade deal,” said Ashley Petersen, oil market analyst at Stratas Advisors in New York. “This is going to be a problem from the rest of the year so there’s going to be more inter-week volatility to come.”
Thursday’s slump dashed what would have been crude’s first monthly gain since July. In addition to international developments such as the Saudi recovery and Chinese trade, TC Energy Corp. declared force majeure after it shut a major U.S. pipeline because of an oil spill.
West Texas Intermediate for December delivery lost $1.31 to $53.75 a barrel at 10:56 a.m. on the New York Mercantile Exchange.
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Brent for December, which expires Thursday, fell 48 cents to $60.13 on the London-based ICE Futures Europe Exchange. The global benchmark crude traded at a $6.38 premium to WTI.
Chinese policy makers are gathered in Beijing for a key political meeting that’s set to conclude on Thursday. In talks ahead of that plenum, some officials have relayed low expectations that future trade negotiations could result in anything meaningful unless the U.S. is willing to roll back more tariffs.
Elsewhere, Royal Dutch Shell Plc cast a warning for next year, with Chief Financial Officer Jessica Uhl saying that oil price expectations for 2020 are trending lower.
