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- Oil prices remain under pressure and could extend their losing streak into a 13th day.
- Both major benchmarks are trading higher on Wednesday, but not by any significant margin.
- Prices dropped as much as 7% on Tuesday after US President Trump again pushed back against Saudi Arabia’s plans to increase production.
- Analysts fear that the price per barrel of oil could fall below $US50.
- You can track oil prices live at Markets Insider.
Oil prices remain under the pump on Wednesday following the commodity’s worst single day of trading in several months, as global fears surrounding demand worry investors.
By around 8.50 a.m. in London (3.50 a.m. ET), the price of West Texas Intermediate, the US benchmark, is only marginally higher, trading 0.2% up at $US55.80 per barrel, while Brent crude, the international benchmark, is around 0.5% higher at $US65.80.
If these prices fall from these levels, oil will endure a 13th straight day of losses, further extending its record losing streak.
“It’s been a perfect storm for oil as of late, with lower global growth expectations, higher output from the US, Russia and Saudi Arabia, waivers on Iranian sanctions and general risk aversion in the markets sending Brent and WTI rapidly into bear market territory,” Craig Erlam, senior market badyst at OANDA, said on Wednesday.
Tuesday’s drop, which saw both Brent and WTI fall about 7%, was driven largely by a tweet from US President Donald Trump, in which he urged Saudi Arabia not to cut production. The tweet came in response to Khalid al-Falih, Saudi Arabia’s oil minister, saying the kingdom is likely to cut production by around 500,000 barrels.
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Oil prices have tumbled into a bear market – down at least 20% from their October peaks – amid concerns of growing stockpiles. Earlier in November, the Trump administration granted eight countries temporary waivers from the sanctions it placed against Iran that were designed to cut off its oil from the rest of the world .
And data released last week by the Energy Information Agency showed US oil inventories climbed by 5.8 million barrels in the week to November 2, while production hit a weekly record of 11.6 million barrels per day.
The oil market had already been under pressure since the beginning of October as trade tensions and concerns over rising interest rates weighed.
Prices may well have further to fall. Erlam said that he “wouldn’t be surprised to see” prices for WTI to slip to $US50 per barrel, and Brent to $US60.
“It’s not too long ago that people were talking about the prospect of $US100 a barrel oil but that now feels like a distant memory.”
The chart below illustrates the drop in WTI oil prices seen since its peak in October:
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