Crude oil still looking for support
Head of Commodity Strategy
Summary: Crude oil still looking for support as weak economic data weighs
The crude oil market has spent the past couple of weeks deflating and eventually removing the risk premium that followed the September 14 attack in Saudi Arabia on the Abqaiq oil-processing facility, the world’s biggest, and the Khurais oilfield. This after the immediate risk of retaliation and escalation faded and the Saudis managed to recover its production much sooner than expected.
Two weeks of almost constant selling has seen both Brent and WTI crude oil return to the lower end of the range that has prevailed since June. The latest OPEC production survey carried out by Bloomberg showed the significant impact on Saudi production last month. The Kingdoms production slumped by 1.47 million barrels per day to 8.36 million thereby accounting for the bulk of OPEC's over all 1.59 million barrels/day reduction to 28.32 million, the biggest monthly drop since 2002 according to Bloomberg.