US crude oil falls more than 1% on supply surplus

U.S. crude’s West Texas Intermediate (WTI) futures were down more than 2 percent, reopening after Thursday’s Thanksgiving holiday.

Brent for January settlement fell 58 cents, or 1.3%, to $45.54/bbl on the London-based ICE Futures Europe exchange. With China’s economy slowing, oil demand growth has waned, leaving oil producers in increasingly intense competition for a market for their product.

“Rather than being bullish…it’s now bearish for marginal demand”, Mr Schieldrop said. Russian Federation said its plane was downed over Syria. Without cooperation from other major exporters, OPEC is unlikely to curtail its own strong production, which would be another factor perpetuating the oversupply. It is its sixth losing week in the past seven.

Brent is down by almost 8 per cent in November and by 20 per cent this year, after tumbling from above $115 last year.

Turkey shot down a Russian craft near the Syrian border on Tuesday, saying the jet had violated its air space, in one of the most serious publicly acknowledged clashes between a North Atlantic Treaty Organisation member country and Russia for half a century.

Therefore there is ample supply of the middle distillates.

World oil prices rose this week on concerns that heightened geopolitical tensions could disrupt Middle East supplies despite a market awash with crude.

“An agreement to cut the production target will definitely be a booster for oil prices”, Aw said. Modelling undertaken earlier in the year by the EIA estimated that oil output would continue to drop by over 160,000kb/d throughout 2016.

US commercial crude inventories increased by 1 million barrels last week, maintaining a total USA commercial crude inventory of 488.2 million barrels.

In U.S. Treasuries trading, benchmark 10-year Treasuries notes were up 3/32 in price to yield 2.239pc, down 1 basis point from late on Monday.

Mr. Wittner said he doesn’t believe there will be “any change in Saudi or OPEC policy”, when the 12-nation oil cartel meets in December.

Gasoline futures recently traded down 0.04% to $1.3955 a gallon.

Both crude contracts were on track for small weekly gains, but were down by roughly 9% since the start of November.

Iran is soon to release 53-M bbl to the market and will be producing up to 1.5-M BPD in 6 months or so. COMEX silver was up 1.45% or 20 cents to $14.27 an ounce, but spot platinum was down 0.42% or $3.57 at $841.68 an ounce.

Tim Puko and Jenny W. Hsu contributed to this article.