Oil prices fell as European and Asian stock markets decline in the wake of the largest daily decline in Wall Street since 2011.
Brent crude oil LCOc1 dropped 82 cents to $75.87, while US light crude CLc1 fell 30 cents to reach $66.52, reported Reuters.
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London brokerage PVM Oil technical analyst Robin Bieber was quoted by the news agency as saying: “The market looks negative with lower numbers likely.”
In an uncertain political environment, investors have become risk-averse.
A number of issues are affecting the financial markets, including the US-China trade war, increasing borrowing costs and Italy’s budget crisis.
Container and dry-bulk rates have dropped significantly this month, indicating a slowdown in global trade.
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By GlobalDataIncreasing concerns over the impact of US sanctions on Iranian crude exports is, however, supporting the oil prices. The sanctions on Tehran will commence from 4 November.
Due to pressure from the US, Chinese oil firms Sinopec and China National Petroleum are yet to purchase oil from Iran for next month.
Iran’s biggest oil customer is China, and suspending supplies from Tehran means Chinese refineries will have to access alternative oil markets.
Global supplies currently seem to be sufficient, with stocks increasing in some regions, especially in the US, where oil production stands at a near record high.
For the fifth consecutive week, US commercial crude oil stockpiles C-STK-T-EIA increased last week. According to Energy Information Administration, the stockpiles increased by 6.3 million barrels to reach 422.79 million barrels.
Last week, US oil production C-OUT-T-EIA stood at 10.9 million barrels per day (Mbpd), showing a decrease from 11.2Mbpd recorded at the start of this month.
