ISLAMABAD: Crude oil prices remained on a downward slide on Monday and neared five-month lows amid bearish market sentiment. As of 1205 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, shed $0.43 (-0.57 percent) to reach $75.41 a barrel. The West Texas Intermediate (WTI), the main oil benchmark for North America, went down by $0.47 (-0.66 percent) to $70.76 a barrel. Both benchmarks hit their lowest levels since late June on Thursday last. However, the price of Russian Sokol increased by $0.87 (+1.24 percent) to $71.30. Arab Light prices witnessed an increase of $0.88 (+1.11 percent) to reach $80.05 a barrel. On the other hand, the price for Opec Basket remained unchanged at $78.31 a barrel. The OPEC Reference Basket of Crudes (ORB) is made up of Saharan Blend, Girassol, Djeno, Zafiro, Rabi Light, Iran Heavy, Basra Light, Kuwait Export, Es Sider, Bonny Light, Arab Light, Murban and Merey. Oil prices lowered despite the US efforts to replenish strategic reserves provided support, as concerns persist about oversupply and softer fuel demand growth next year. The recent price weakness drew demand from the United States, which has sought up to 3 million barrels of crude for the Strategic Petroleum Reserve (SPR) in March 2024. Despite the Organization of the Petroleum Exporting Countries (OPEC) and allies, together known as OPEC+, having pledged to cut 2.2 million barrels per day (bpd) of production in the first quarter, investors remain sceptical about compliance. Output growth in non-OPEC countries is expected to lead to excess supply next year. Brent and WTI crude futures slid to their lowest since late June on Thursday, a sign that many traders believe the market is oversupplied. Fuelling the market’s downturn, Chinese customs data showed its crude oil imports in November fell 9 percent from a year earlier as high inventory levels, weak economic indicators and slowing orders from independent refiners weakened demand. TLTP
The US Labour Department data released on Friday showed stronger-than-expected job growth and a drop in the unemployment rate, signaling resilience in the labour market and dampening hopes that the Federal Reserve will cut interest rates by early next year.
Oil prices, which surged to about $98 in September, have fallen by over 24 percent since then. Crude jumped at the start of the Israel-Gaza war in October on concerns that it would escalate into a broader conflict in the region, which is responsible for about a third of the world’s oil production. However, supply concerns have eased, in part due to higher oil production in Iran and the easing of sanctions on Venezuela.
