Crude oil in spot market saw steady downtrend move across the month of October.
West Texas Intermediate for December delivery lost 5 cents to $63.64 a barrel on the New York Mercantile Exchange at 10:26 a.m. London time, after falling $1.62 on Thursday. WTI is now more than $11 below its October 3 high of $76.90. The Brent crude benchmark was trading down 1.51% (-$1.17) at $76.20, also flat on the week.
The summer driving season usually leads to higher consumption of gasoline in the United States for domestic travel, while the early fall is instead a period marked by refinery maintenance, all of which reduces oil consumption.
"The U.S. may use waivers to slow-walk implementation, but these will not apply indefinitely", he added.
There's at least one similarity between 2016 and 2018: The oil market experienced strong gains in the first six months of the year before hitting a volatile patch in the second half.
USA crude futures broke through the $65 level that had held in place for the last several months, raising the possibility of further selling. Both stock markets and crude futures jumped in early October before selling off sharply.
"This has been the highest correlation that I've seen in quite some time", he said Tuesday on CNBC's "Futures Now".
High oil prices are hurting consumers and could dent demand, the executive director of the International Energy Agency (IEA) said yesterday.
The US remains apart from any agreement with OPEC and its partners and continues to work to increase its oil production capacity.
Adequate oil supply and an uncertain global economic outlook also dampened sentiment.
But there's another similarity between July 2016 and October 2018. However, expectation of a trade deal between the U.S. and China have eased global tensions and restricted the fall in global prices of the fuel.
That will offset the decline in Iranian exports that could tighten supply.
But in the last month, forecasters have warned that oil demand will grow more slowly than anticipated in the coming months. Saudi Arabia raised production by 150,000 barrels a day to 10.68 million a day, the highest in Bloomberg data going back to 1962, while Iranian volumes slipped by 10,000 barrels a day to 3.42 million. "Meanwhile, the recent build in inventories was likely due to outsized PADD2 maintenance in the US", Malek writes, in a note to clients Thursday.
News of a global economic slowdown will impact sentiment but the market appears to be relatively well supplied despite the imminent Iran sanction effect.
Trump said he would like to make a deal now but that China was not ready. "Technically the market has been in a weak position", said Phil Flynn, analyst at Price Futures Group in Chicago.