Oil futures remained under pressure Thursday as the new month got under way, building on an October rout that left crude with its biggest monthly decline in more than two years.
West Texas Intermediate crude for December delivery CLZ8, -0.57% on the New York Mercantile Exchange fell 35 cents, or 0.5%, to $64.96 a barrel. The global benchmark, Brent crude for January delivery LCOF9, -0.67% fell 75 cents, or 1%, to $74.29 a barrel. Brent fell 8.8% in October. The declines were the biggest monthly percentage falls for both grades since July 2016.
“Rising petronations’ oil production, the U.S. shale oil boom, swelling North American oil inventories and, not least, too high oil prices curbing emerging market oil demand growth were the factors which calmed the bullish market mood” in October, pulling the price of Brent from above $85 a barrel to below $75,” said Norbert Ruecker, head of macro and commodity research at Julius Baer, in a note.
Those factors offset worries surrounding renewed U.S. sanctions on Iran, which take full effect next week.
A U.S.-led global equity rout also served to dent sentiment in the oil market, analysts said. Stock benchmark S&P 500 SPX, +1.09% saw its biggest monthly decline in seven years last month.
All that said, the Iran embargo will leave the global market with only a small buffer to absorb any shocks, likely skewing price risks to the upside in the near term, Ruecker said, while the impact of the embargo will likely depend on the degree of compliance by China and India, the two largest buyers of Iranian crude.
Oil was also under pressure Wednesday after the Energy Information Administration said U.S. crude supplies rose 3.2 million barrels in the week ended Oct. 26, the sixth straight weekly increase.
In other energy trade, December gasoline RBZ8, -0.06% fell 0.1% to $1.7489 a gallon, while December heating oil HOZ8, -0.29% was off 0.9% to $2.2322 a gallon.
December natural-gas futures NGZ18, +0.31% rose 1% to $3.293 per million British thermal units.
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