Longest oil prices losing streak since June: what are the factors causing such trend in the oil markets and how long is it going to last?
4 November, AtoZForex – Oil has been headed further down for the sixth straight session on Friday, as the build in the US supply, weak growth of demand and the doubts over the deal by the Organization of the Oil Exporting Countries (OPEC) are weighing on crude prices.
What causes oil prices losing streak?
Brent crude futures were trading at $46.21 per barrel at 0740 GMT, down 14 cents from their last session, where the US West Texas Intermediate (WTI) futures were changing hands at $44.57 per barrel, down 9 cents.
Such falls have put crude on its longest oil prices losing streak since June. BMI Research has commented ont his matter:
“The persistent market dynamic of softer demand and stronger supply will become a more dominant driver of prices as the impact of OPEC’s verbal interventions begins to fade and expectations for coordinated cuts are readjusted.”
It further stated that it sees a trading range of $43-53 per barrel being present in the market till the beginning of 2017, where its outlook for Brent and WTI is recorded at the average of $55 and $53.5 per barrel, respectively.
Investors pulling out the money
Moreover, market experts stated that oil markets also have been dragged down by the outflow of the funds from futures ahead of the US Presidential elections, which is perceived as a potential threat to the markets.
Adding to the concerns around the US elections, investors believe that oil fundamentals also appears weak, with the US inventories on the rise, the doubts about the OPEC oil cut deal and the weak growth of demand for the oil.
The growth of the demand over the period July-September has appeared less than a third of the same quarter a year ago, according to Barclays’ calculations. Moreover, the consumption rise for the Q4 is not expected to be much higher, as it is reported by the bank.
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