World Oil Prices Drop And Rise From Lows In 2 Weeks

Illustration. (Photo: Doc. Antara)

JAKARTA - Oil prices fell in late trading Thursday (Friday 29 October EST), but bounced off two-week lows as concerns about growing US supply competed with speculation that Iranian supplies could be running again following nuclear talks with global powers.

Reporting from Antara, Brent crude for December delivery settled 26 cents, or 0.3 percent lower, at 84.32 dollars per barrel. During the session, Brent briefly hit a two-week low of 82.32 dollars a barrel after falling 2.1 percent on Wednesday 27 October.

US West Texas Intermediate (WTI) crude for December delivery rose 15 cents, or 0.2 percent, to close at 82.81 dollars a barrel. During the session, the contract touched a two-week low of 80.58 dollars. On Wednesday October 27, WTI tumbled 2.4 percent after weekly data showed U.S. crude stockpiles rose more than expected.

On Wednesday, Iran's top nuclear negotiator Ali Bagheri Kani said the country's talks with six world powers to try to revive the 2015 nuclear deal would resume at the end of November.

A deal could pave the way for lifting tough sanctions imposed by former US President Donald Trump on Iran's oil exports in late 2018.

"The market is reacting to these headlines, but may be disappointed with how much oil is actually coming back," said Phil Flynn, senior analyst at Price Futures Group in Chicago.

U.S. crude stockpiles rose 4.3 million barrels last week, the U.S. Department of Energy said on Wednesday, more than double the 1.9 million barrel increase forecast by analysts.

The hefty buildup of stockpiles was due to a large spike in net imports of crude while refinery processing remained sluggish, Citi Research analysts said in a note.

But gasoline stocks fell 2 million barrels to their lowest level in nearly four years, even as US consumers competed with rising prices at gas stations.

At WTI's delivery hub in Cushing, Oklahoma, crude storage is at a three-year low, with prices for the longer futures contract suggesting supply will remain low for months.

Energy information provider Genscape said that as of Oct. 26, tank levels at Cushing had fallen by 2.772 million barrels in the last week, market participants said.

The outbreak of coronavirus infections in China and record deaths and the threat of a lockdown in Russia, along with rising cases in western Europe, are also weighing on oil prices.