World News: US, Russia, Saudi Arabia Crash Oil Prices

Crude Oil

Crude Oil

U.S. West Texas Intermediate (WTI) crude futures advanced 55 cents, or 0.9 percent, to $66.73 a barrel on Wednesday.

Brent has fallen by over 12 percent since the beginning of October, while WTI has lost more than 13 percent in value. Thanks largely to US shale, the fast-growing production from the USA has moved the United States ahead of both Russian Federation and Saudi Arabia. They fell 1.8 percent on Tuesday, at one point touching their lowest since August 24 at$75.09 a barrel. The report was largely in line with analyst expectations that this week would see another substantial build in crude oil inventories of 4.110 million barrels.

USA crude oil production has increased significantly during the past 10 years, driven mainly by production from tight oil formations using horizontal drilling and hydraulic fracturing.

The market is growing confident output from other sources, including Saudi Arabia/Opec, Russia and the USA, can offset the declines.

That will offset the decline in Iranian exports that could tighten supply.

While the current market outlook is for slower global demand while economic growth eases, the possibility still remains that growth doesn't slow notably and current oil stocks and output levels won't be enough to satisfy demand. Ultimately, this is a market that is testing a major support level, and even though we pierced that level, by the end of the day it looks like the buyers are quite ready to give up.

According to API data, the six-week running tally of crude oil inventory gains equals 27 million barrels.

Brent for January settlement advanced 32 cents, or 0.4 percent, to $73.21 a barrel on the London-based ICE Futures Europe exchange.

Investors will look to official government data on USA inventories due on Wednesday.

The Organization of the Petroleum Exporting Countries (OPEC) boosted oil production in October to 33.31 million barrels per day (bpd), a Reuters survey found this week, up 390,000 bpd from September and the highest by OPEC since December 2016.

Increases in global supply, as well as trade war tensions between the United States and China, sent oil plunging earlier in the week.

Oil extended its slide to six-month lows as the USA dialed down its crackdown on Iranian exports and American supplies surged, easing concerns of an impending shortage.

The United States has 875 operating oil drilling rigs in this week, adding two more from the previous week, according to data issued by oil service company Baker Hughes on Friday. The month of November saw crude oil continue to trade bearish in spot and futures market.

But oil supply from other countries is rising.

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