Oil prices drop amid rising supplies

Income growth, coupled with slow economic momentum, offset a few of the consumer stimulus from lower crude oil prices. Futures dropped as much as 1.9 percent to $39.91, the lowest since August 27.

Gasoline stockpiles unexpectedly rose in the week, while supplies of distillates, including diesel fuel and heating oil, fell more than expected.

It pointed out in a commentary that the global market remains oversupplied, crude inventories in developed countries are at record levels and there is no direct threat to Middle East oil facilities and transit points.

“It’s hard to see more upside potential, although we might be getting closer to the equilibrium price level where we meet the sweet spot in the supply and demand equation”, he told AFP. Platinum was down 1.0 per cent at $US841.75 an ounce, after falling to a seven-year low at $US840.40 an ounce. Economists surveyed by oil-information firm Platts had produced a consensus estimate for a rise of 1.1 million barrels. But despite a fall of 350,000 b/d since July, Saudi output has remained consistently above 10 MMb/d since March.

“In fact, all the signs, including an expected contraction in non-OPEC supply next year, suggest that the likelihood of a policy change is pretty small”.

REUTERS/BeawihartaSaudi Arabian oil production climbed in September according to data from JODI, showing that the world’s biggest oil producer sent 7.11 million barrels of oil overseas per day.

NEW YORK-Oil prices briefly dropped below $40 a barrel Wednesday before settling higher as the dollar pared gains.

Here is a look at how share prices for two blue-chip stocks and two exchange traded funds reacted to this latest report.

“The trend is your friend, and the trend is down”. “There is a little bit of geo-political risk, but the fundamentals remain bearish”.

Traders also seem to be positioning for cheap oil well into next year, with the number of options to sell at $30 a barrel in March 2016 jumping from virtually zero before August to nearly 12,000.

Brent crude futures settled down 99 cents at $43.57 a barrel, touching a session low at $43.50. Front-month Brent crude is now trading at around $44 per barrel.

The Wall Street Journal Dollar Index, which tracks the dollar against a basket of other currencies, rose 0.1% Tuesday on expectations that the Federal Reserve is due to raise interest rates in December. These reports caused crude oil prices to fall in the last week.