Oil futures sold off again on Wednesday, on track for a third day in the red, as fears about waning demand in China continued to weigh on prices.
Price action
-
West Texas Intermediate crude for December
CL00,
-1.14% CL.1,
-1.14%
delivery fell $1,35, or 1.5%, to $86.69 a barrel on the New York Mercantile Exchange after falling 4% during the first two trading days of the week. -
January Brent crude
BRNF23,
-1.12%
the global benchmark, was down $1.44, or 1.6%, to $91.15 a barrel on ICE Futures Europe. -
Back on Nymex, December gasoline
RBZ22,
-2.08%
f ell 2.3% to $2.51 a gallon, while December heating oil
HOZ22,
-1.87%
lost 1.9% at $3.69 a gallon. -
December natural gas
NGZ22,
-5.77%
dropped 4.2% to $5.88 per million British thermal units.
Market drivers
Oil and gas prices have declined in recent sessions despite an OPEC+ output target cut and hopes for less restrictive COVID-19 measures in China. So far, Beijing has shown no signs of loosening COVID-related restriction, which has weighed on energy prices, said Craig Erlam, senior market analyst at OANDA.
China’s consumer inflation eased in October, while factory-gate prices fell from a year ago for the first time in nearly two years, reflecting weakening domestic demand as the economy cooled further.
API data on Tuesday showed an increase in U.S. inventories, but investors will now be looking to see if the increase is confirmed by an inventory report from the Energy Information Administration.
On average, analysts expect the EIA report to show supply declines of 700,000 barrels for crude, 1.2 million barrels for gasoline, and 900,000 barrels for distillates, according to a survey conducted by S&P Global Commodity Insights, as MarketWatch reported on Tuesday.
