Crude Oil Benchmark Brent Sees Biggest One-Day Fall In Two Years

12 July, 2018, 11:22 | Author: Eric Barnett
  • Crude oil plunges after Trump tariff threat, Libya ports reopen

That dropped overall crude inventories, not including the USA strategic reserve, to 405.2 million barrels. The sell-off intensified after news of a fall in US crude oil inventories failed to reverse market sentiment.

"Both oil contracts have recently stalled around key long-term and psychologically-important levels at $80 and $75 respectively, as market participants weigh the risks of a potential correction in prices", Fawad Razaqzada, an analyst at FOREX.com, said in a note. Supply to the USA market has also been squeezed by the loss of some Canadian oil production.

"Although there is a long deadline on this, if these tariffs are introduced there will be an impact on global growth and demand", McCarthy said.

The announcement by Libya's National Oil Corp that four export terminals were being reopened, ending a standoff that had shut down most of Libya's oil output, was the catalyst for a correction, Razaqzada said.

Washington had previously said countries must halt all imports of Iranian oil from November 4 or face USA financial restrictions, with no exemptions.


The report boosted hopes of rise in oil supplies in coming days, even as data released by USA suggested that crude oil stockpiles fell by more than 12 million barrels last week.

Secondly, the recent rally was being supported partly from a drop in Libyan output.

Saudi Arabia said that it pumped almost 10.5 million barrels per day last month, compared with 10 million in May.

The bearish mood was also fueled by news the United States would consider requests for waivers from sanctions due to snap back into place on Iranian crude exports. Higher gas prices can leave US households with less money to spend on other products. Additionally, at some time in the near future, the Canadian pipeline problem will be fixed and the supply disruption over. This will bring additional crude to the market.

According to the September WTI chart, the trend is down according to the daily chart, putting the market in a position to test $67.99 to $66.81.

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