Crude Prices Near One-Month Low

The physical crude market has also deteriorated in the last few weeks.The physical crude market has also deteriorated in the last few weeks.

Oil fell for a second day on Monday, nearing its lowest in a month, as rising US output and a weaker physical market added to the pressure from a widespread decline across equities and commodities.

Friday’s US jobs report that showed the fastest wage growth in nearly nine years exacerbated a broader market selloff that was already underway, as Wall Street stocks backed off record highs and a rising dollar dented commodities, CNBC reported.

Brent crude futures were down 36 cents at $68.22 a barrel, while US West Texas Intermediate crude fell 13 cents to $65.32.

“Oil is caught up in this general risk-off move, not helped at the margins by a little bit of strength in the US dollar,” said Ric Spooner, chief market analyst at CMC Markets in Sydney.

The S and P 500, an American stock market index based on the market capitalizations of 500 large companies having common stock listed on the NYSE, saw its largest one-day fall since September 2016 on Friday, but is still up 3% since the start of this year and up 21% since February 2017, having hit a record high in late January.

“The size of the move in US equities does not always mean this, but usually after a move like that and particularly when it follows such a long uptrend, there is follow-through selling,” Spooner said.

The physical crude market has also deteriorated in the last few weeks, as the price of North Sea oil has hit its lowest in eight months, while Russian Urals crude changed hands last week at its lowest in a year.

“We are really going into a period of a lot of refining maintenance so it’s not unexpected that the selloff is happening,” Petromatrix strategist Olivier Jakob said.

Saudi Arabia over the weekend said it had cut the official selling prices for its crude to European customers, a sign that the world’s largest oil exporter may be warding off potential weakness in the region.

Adding to the pressure on oil, which hit its highest in nearly three years two weeks ago, has been evidence of rising US crude production, which could threaten the Organization of Petroleum Exporting Countries’ effort to support prices.

Data from the US government last week showed that output climbed above 10 million barrels per day in November for the first time since 1970, as shale drillers expanded operations after gains in oil prices last year.

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