Oil suffers the biggest monthly loss in over 2 years

Oil futures declined on Wednesday, as the weekly increase in US crude supply was close to market expectations and commodity inventories declined.

Prices also recorded their largest monthly percentage decline in more than two years, as output growth and the potential for slowing energy demand exceed expectations of further declines in Iranian oil exports, with US sanctions expected to begin next week.

West Texas Intermediate gross for December delivery

CLZ8, -0.32%

fell 87 cents, or 1.3%, to settle at $ 65.31 a barrel on the New York Mercantile Exchange. On the basis of the first month contracts, prices lost 10.8%, according to Dow Jones Market Data.

December World Brent Benchmark

LCOZ8, -0.59%

which has expired at the settlement, fell 44 cents, or 0.6%, to $ 75.47 a barrel on the ICE Futures Europe Exchange. Contract prices in the first month decreased by approximately 8.8% for the month of October.

Brent and WTI, which experienced another low in more than two months, experienced their largest monthly percentage decline since July 2016.

The Energy Information Administration reported Wednesday that supplies of domestic crude increased by 3.2 million barrels for the week ended Oct. 26. This increase followed five consecutive weeks of earnings. Analysts surveyed by S & P Global Platts had forecast an increase of 3.3 million barrels, while the American Petroleum Institute announced Tuesday an increase of 5.7 million barrels.

"Although [crude] Refining plants are skyrocketing, far from the depths of the maintenance season, there has always been a sixth consecutive build-up of oil inventories, "said Matt Smith, director of commodity research at ClipperData .

"In the same way as last week, the bullishness of the products served as a counterbalance to bearish sentiment," he said, adding that half of the gross output reported came from another version of the strategic oil reserve.

Gasoline inventories fell 3.2 million barrels last week, while distillate inventories fell by 4.1 million barrels, according to EIA. The S & P Global Platts survey showed forecast supply declines of 2.4 million barrels of gasoline and 2.2 million barrels of distillates.

In November, gasoline was $ 1.768 per gallon, down 2.1% for the session, as prices were based on the previous month's contract, which represented a monthly loss of 15.9%. November oil

HOX8, -0.38%

raked close to 0.1% to $ 2.262 per gallon, a monthly decrease of 3.8%. The November contracts expired at the settlement of the day.

December natural gas

NGZ18, + 0.55%

rose 2.3% to $ 3,261 per million British thermal units, with prices up 8.4% for the month, based on the previous month, according to Dow Jones MarketData.

At the same time, US sanctions against the Iranian oil industry are expected to come into effect early next week after President Donald Trump withdrew in May the 2015 US agreement to curb Iran's nuclear program, opening thus the way to the reimposition of the sanctions.

Perhaps a more important question has been whether other producers will compensate for the lost supply. Saudi Arabia, which de facto chaired the Organization of the Petroleum Exporting Countries, and the main producers outside the cartel, mainly Russia, agreed early in the summer to start increasing crude oil production after more than a year of slowdown. The Saudis' comments in recent weeks that they could increase production more quickly, reaching at least 11 million barrels a day, have again weighed on prices lately.

"Some market watchers thought early in October that the price would rise to $ 100, raising the question of what has fundamentally changed over the past three or four weeks," said Carsten Fritsch and the Commodities Team. from Commerzbank.

"What has changed most is the sentiment of the markets, in part because of the growing concern over the US-China trade conflict and the recent decline in stock market prices, although Actual demand data remained robust in September, "says Commerzbank, he said. "Supply has also played a role, as crude oil stocks in the United States have increased significantly for weeks. [while] Saudi Arabia, Russia and Libya significantly increased their oil production in October. As a result, oil producers seem to be successfully offsetting the supply disruptions of Iran and Venezuela. "

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