Oil Slumps for Fourth Day, Hits 4-Mo Low on Glut Fears

Oil Falls 4th Straight Day, Hits 4-Mo Low On Glut Worry

SECAUCUS, NJ (DTN) – Oil futures tumbled a fourth day in a row and to a four-month low on Thursday (10/2) driven by supply glut concerns following a weekly build in U.S. petroleum stockpiles and more barrels anticipated from OPEC+ countries meeting at the weekend.

A U.S. federal government shutdown, in force for more than 24 hours, had scant effect on oil markets. However, this could change in the medium to longer term if the shutdown affects the economy and, consequently, reduces demand for energy. Data already shows U.S. consumer sentiment at a three-month low in September.

At the close, NYMEX-traded WTI for November delivery fell $1.30, or $2.1%, to $60.48 bbl. It sunk to $60.42 during the session, the lowest for a continuous futures contract in U.S. crude since June 6, when it bottomed at $60.29.

ICE Brent crude for December delivery retreated by $1.21 to $64.14 bbl. The UK crude contract’s low was an even $64, a trough not seen since its June 6 bottom of $63.41.

Oil products weren’t spared from the sell-off. Diesel, until lately an outlier of the petroleum futures complex, was firmly in the red too, dropping $0.0599 to $2.2420 gallon after a six-week low at $2.2375 gallon.    

November RBOB gasoline futures was down $0.0361 to $1.8498 gallon, after a three-month low at $2.2375.

A rebound in the U.S. currency, which typically trades in contrarian to commodities, added to the weight on oil. The  U.S. dollar Index rose 13 points to 97.87 against a basket of foreign currencies.

Oil futures have seen torrid selling for most of the past two months. The bearish streak accelerated Wednesday (10/1) with the Energy Information Administration reporting higher commercial crude oil inventories, as well as a surprisingly large 4.1 million bbl build in gasoline stocks, for the week ended September 26.

OPEC+ production, initially in the periphery of market concerns, became a greater factor as Sunday’s (10/5) meeting of the 23-nation alliance neared, with speculation that the group will add to November output quotas. Also on traders’ radar is the imminent return of 200,000 barrels per day or more of northern Iraq oil, restricted from the market since 2023.