Oil took a breather from its ascent to the highest level in almost four years, as investors weigh OPEC’s ability to replace falling Iranian exports.
Iranian crude and condensate exports declined to their lowest in 2 1/2 years before the impending return of U.S. sanctions. Meanwhile, the new U.S.-Mexico-Canada Agreement, which superseded the 24-year-old North American Free Trade Agreement, eased some concerns about global commerce. In the U.S., the industry-funded American Petroleum Institute was said to report domestic crude inventories rose 907,000 barrels last week.
Crude has rallied about 16 percent since mid-August as supply losses from Iran to Venezuela continue to rattle global markets. OPEC and its allies are also showing little enthusiasm for boosting output despite President Donald Trump’s demand for lower prices.
“The market bounces around a lot,” Michael Lynch, president of Strategic Energy & Economic Research, said. “As of now, people are hedging on the side of fear rather than working the probabilities.”
West Texas Intermediate for November delivery traded at $75.05 a barrel at 4:37 p.m. after settling at $75.23 a barrel on the New York Mercantile Exchange. Total volume traded was about 29 percent below the 100-day average.
Brent for December settlement fell 18 cents to $84.80 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a $9.76 premium to WTI for the same month.
In the Americas, the new trade agreement was secured just before a Sunday midnight deadline, allowing leaders from the three nations to sign the deal by late November. While trade tensions still remain, the deal caps a turbulent time for the U.S. and Canada, traditionally close allies on national security and trade.
The API also was said to report inventories at the key Cushing, Oklahoma, storage hub rose 2.02 million barrels, while gasoline and distillate stockpiles decreased.
Domestic crude inventories probably increased 1.5 million barrels last week, according to a Bloomberg survey of analysts. Meanwhile, supplies at Cushing likely gained 800,000 barrels last week, according to a forecast compiled by Bloomberg.
The Energy Information Administration will release its inventory report on Wednesday.
Oil-market news:
- Gasoline futures fell 0.06 cents to $2.1269 a gallon.
- Talks between Saudi Arabia and Kuwait to restart two oil fields in a neutral zone between the countries have stalled again, this time over the role of Chevron Corp., according to people familiar with the matter.
