Current Oil Prices Drop after Three-Week High
The current oil prices reflect a drop after reaching a three-week high as worries about global demand trumped inventory concerns related to growing conflict in the oil-rich Middle East.
On the NYMEX, the crude price per barrel for delivery in November shed $1.14 from its settlement rate in the previous day to end at $91.25. While in London, Brent crude for delivery in November lost 17 cents to $114.33 per barrel.
After reaching its highest level in almost three weeks at $93.66, the crude price per barrel in New York fell during late trading due to a technical correction increased by demand worries. According to analysts of BMO Capital, the up and down movement goes on in the front of the futures curve as lower demand projections fight against possible supply threats.
Oil recently gained almost $3 on increasing worries that the conflict in Syria may reach Turkey following border conflict over the last week.
While direct oil supply loss seems unlikely as long as mortar volleys are restricted and irregular, the escalation or continuity of military tension does increase the amount of Middle Eastern uncertainty, according to analysts. The rally in spot Brent futures prices for the current week may be partially attributed to this new dynamic.
Moreover, prices were seeking support from more delays in the oil-loading programs of the North Sea, high quantities of West African oil being set for Asian delivery in the month of October, and on-going tightness in commodity markets bringing refining margins close to their highest in many years