Oil prices tumbled by as much as $2 in the final minutes of regular trade on Monday, with US crude breaking to a 29-month low as technical selling overwhelmed news of a hike in Saudi Arabia's export prices. A rising dollar and concerns about Chinese economic growth set a bearish tone early in the session, but global benchmark Brent crude briefly turned positive after news that Saudi Aramco had hiked their monthly selling prices to Asia and Europe, a signal that some took as a sign of plans for lower output.
-- Saudi Arabia raises prices to Asia, Europe; cuts prices to US
-- Reuters Opec survey shows slightly lower Opec output
But Aramco also cut its prices for US customers, helping drive the futures curve into a contango structure for the first time since January. Selling in the New York market accelerated after prices broke the October 27 intraday low of $79.44, traders said. "It looks like the market is brushing it (Saudi price hike) off," said Bill Baruch, senior market strategist at futures for iitrader.com LLC in Chicago. "Chinese data is really ultimately weak so is demand really going to be there for oil at a higher price?" US crude fell $1.98 to trade at $78.56 per barrel by 1935 GMT, its lowest since June 2012.
Brent crude fell as low as $84.28 per barrel and was last trading down $1.38 at $84.48 per barrel. The dollar powered to a seven-year peak against the yen and a two-year high against the euro on Monday, extending gains after the Bank of Japan's latest stimulus move and weighing on oil, which is priced in the US currency.
Stronger-than-expected US manufacturing data for October helped boost the dollar, while Chinese economic data pointed to slowing overall growth and the risk of falling oil demand from the world's second-largest economy. Brent and US crude briefly reversed losses in midday trade, spiking higher after state oil firm Saudi Aramco said it would raise the price of its flagship Arab light crude in December for customers in Asia and Europe, reversing some price cuts the previous month.
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