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Oil prices fall to around $90/bbl in volatile trade
Published by Jessica Weisman-Pitts
Posted on October 18, 2022
2 min readLast updated: February 3, 2026
Global Banking & Finance Review®
Company
Published by Jessica Weisman-Pitts
Posted on October 18, 2022
2 min readLast updated: February 3, 2026
By Rowena Edwards
LONDON (Reuters) -Oil prices fell in volatile trade on Tuesday on fears of higher U.S. supply amid economic slowdown and lower Chinese fuel demand.
Brent crude futures fell by $1.35, or 1.47%, to $90.27 a barrel by 1406 GMT.
U.S. West Texas Intermediate (WTI) crude futures were down $1.77, or 2.07%, at $83.69, having risen by over $1 earlier in the session.
China’s fuel demand outlook weighed on sentiment after the world’s top crude oil importer delayed release of economic indicators originally scheduled to be published on Tuesday. No date was given for a rescheduled release.
China’s adherence to its zero-COVID policy has continued to increase uncertainties about the country’s economic growth, CMC Markets analyst Tina Teng said.
Also in focus was the Bank of England’s plan to start selling the vast government bond holdings it amassed during the coronavirus crisis. That sent long-dated yields higher, indicating increased risks to financial stability.
On the supply side, market chatter of U.S. oil reserve release announcement weighed on sentiment, UBS analyst Giovanni Staunovo said.
The Biden administration plans to sell oil from the Strategic Petroleum Reserve in an effort to cool fuel prices before next month’s congressional elections, sources told Reuters on Monday.
In addition, U.S. crude oil stocks were expected to have risen for a second consecutive week, a preliminary Reuters poll showed on Monday.
Output in the Permian Basin of Texas and New Mexico, the biggest U.S. shale oil basin, is forecast to rise by about 50,000 barrels per day (bpd) to a record 5.453 million bpd this month, the Energy Information Administration said.
Price support came in early trading from investors increasing long positions in futures after a 2 million barrel per day (bpd) cut to output targets agreed by OPEC+, ANZ Research analysts said in a note.
Several members of the oil producer group have endorsed the cut after the White House accused Saudi Arabia of coercing some nations into supporting the move, a charge Riyadh denies.
“Even though the production cut is not likely in reality to be even half as high, the U.S. government sees it as an affront … The question now is how the U.S. will react, as this could have a far-reaching impact on the oil market,” Commerzbank said in a note.
(Reporting by Rowena Edwards in London,Additional reporting by Isabel Kua in Singapore,Editing by David Goodman and Ed Osmond)
Brent crude oil is a major trading classification of crude oil originating from the North Sea. It serves as a benchmark for pricing oil globally and is used to determine the price of two-thirds of the world's crude oil.
West Texas Intermediate (WTI) is a grade of crude oil used as a benchmark in oil pricing. It is sourced from the U.S. and is known for its high quality and low sulfur content.
OPEC+ is a group of oil-producing countries that includes the Organization of the Petroleum Exporting Countries (OPEC) and other oil-producing nations. They collaborate to manage oil production levels to influence global oil prices.
Crude oil stocks refer to the amount of crude oil held in storage facilities. These stocks are monitored to gauge supply levels and can impact oil prices based on changes in inventory.
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