Oil drifts to new five-month lows on supply glut worries, trade tensions

[Data analyzing in commodities energy market: the charts and quotes on display. US WTI crude oil price analysis. Stunning price drop for the last 20 years.]
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Crude oil futures edged slightly lower Monday, extending last week’s downward trajectory as investors assessed a looming supply glut, U.S.-China trade tensions, and weaker energy demand.

Oil prices remain on the defensive with a supply surplus looming while another Trump-Putin meeting could lead to de-escalation of the Russia-Ukraine war, "which again is keeping pressure on crude prices," and with OPEC+ adding barrels and U.S. production holding, "the near-term outlook is likely lower," Dennis Kissler of BOK Financial said in a note.

Citi analysts said commercial oil inventories among the countries in the Organization for Economic Cooperation and Development over the last month have climbed by more than 10 million barrels and water levels are "swelling," increases that will keep Brent crude prices at the $60/bbl level.

Citi also said China's oil purchases, which have helped to support prices, may be slowing., perhaps affected partially by U.S. sanctions on China's Rizhao oil terminal for helping to facilitate Iranian energy trading.

Front-month Nymex crude (CL1:COM [https://seekingalpha.com/symbol/CL1:COM]) for November delivery closed $0.02 lower to $57.52/bbl after falling as far as $56.35/bbl, while front-month Brent December crude (CO1:COM [https://seekingalpha.com/symbol/CO1:COM]) settled -0.4% at $61.01/bbl, the weakest levels for both benchmarks since early May.

Front-month Nymex November natural gas (NG1:COM [https://seekingalpha.com/symbol/NG1:COM]) posted their biggest one-day increase in more than three months, finishing +12.9% to $3.397/MMBtu, as some colder weather entered forecasts for the end of the month, prompting a round of short-covering.

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MORE ON CRUDE OIL

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* Macro Insights: Hot Takes And The Trade War's Resurgence [https://seekingalpha.com/article/4830744-macro-insights-hot-takes-and-the-trade-wars-resurgence]
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