Oil prices drop on swelling oversupply\, volatile markets

Oil prices drop on swelling oversupply, volatile markets

Reuters  |  SINGAPORE 

By Gloystein

U.S. Intermediate (WTI) dropped by 1.8 percent, or 82 cents, from their last settlement to $45.72 by 0739 GMT.

International Brent crude futures were down 1 percent, or 53 cents, at $54.38 a barrel.

China's crude oil futures, launched only in March 2018, have since late last year established a slight but steady price premium over the Brent benchmark, last trading at 379.8 yuan ($55.24) per barrel.

In physical oil markets, top exporter is expected to cut February prices for heavier crude grades sold to by up to 50 cents a barrel due to weaker fuel oil margins, respondents to a survey said on Thursday.

"Fears of future economic and earnings growth continue to be the main in causing market jitters," said Singapore-based brokerage said.

Markets were roiled by a more than 3 percent slump of the U.S. dollar against the Japanese yen overnight, and after cut its sales forecast.

"We did not foresee the magnitude of the economic deceleration, particularly in Greater China," said.

The slowdown in and turmoil in stock and currency markets is making investors nervous, including in

Slowing economic growth would have a negative effect on as markets eye the potential for softer petroleum demand, said.

wrote in a note to clients and employees that the start of the year was a period of "extreme disarray" and that "the future doesn't feel as certain and optimistic, and the path forward does not seem as clear."

Although the pointed out that especially the U.S. economy was "still in a good place", it added that the Sino-American "trade war has become an impediment" and that "markets are extremely volatile and virtually impossible to anticipate or navigate."

are also under pressure from a surge in supply just as demand growth is expected to slow amid the market turmoil.

U.S. crude production stood at a record 11.7 million barrels per day (bpd) in late 2018, making the world's biggest

Others are not sitting idle, with Russian output reaching a record of more than 11 million bpd in 2018.

Supply from Iraq, the number two in the Organization of the Petroleum Exporting Countries (OPEC), is also up, with December exports at 3.73 million bpd, up from 3.37 million bpd in November.

($1 = 6.8751 Chinese yuan renminbi)

(Reporting by Gloystein; editing by Richard Pullin)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, January 03 2019. 13:30 IST