WTI recovers modestly from multi-week lows, looks to settle near $39
- Crude oil prices are falling for fourth straight day on Monday.
- WTI touched its lowest level in nearly two months at $38.55.
- Saudi Aramco lowered October official selling price to Asia.
Crude oil prices fell sharply last week and continued to push lower on Monday. The barrel of West Texas Intermediate (WTI), which lost more than 8% last week, slumped to its lowest level since July 10th at $38.55 during the early Asian session and has gone into a consolidation phase. As of writing, the WTI was down 0.9% on the day at $39.10.
Earlier in the day, China's General Administration of Customs reported that crude oil imports rose by 12.6% on a yearly basis in August. This reading showed a slowdown in China's record oil purchases that was registered in the previous months and weighed on prices.
Meanwhile, Saudi Arabia's state oil producer Aramco announced that it lowered its October official selling price (OSP) to Asia by $1.4 per barrel, forcing the WTI to remain under bearish pressure.
On a positive note, Russian energy minister Alexander Novak said that Russia has fulfilled its oil output cut agreement by almost 100% in August.
Later in the week, the API's and the EIA's weekly oil inventory report from the US will be looked upon for fresh impetus.
Oil outlook
Rabobank analysts shared their view on oil with key quotes found below.
“We continue to focus on macro factors influencing oil prices as they remain crucial drivers. Further to that point, the sharp decline in equities this week and strength in the US dollar is notable and the potential for further corrections in risk assets is certainly feasible.”
“As for oil fundamentals, the fact that Iraq is reportedly seeking a two-month extension to make up for the additional OPEC+ supply cuts is a rather telling development to our minds. As such, we see cracks forming in the tight supply narrative and even view Libya as an imminent upside supply risk as that struggling OPEC producer seeks to resume oil exports in the near future.”
Technical levels to watch for