Saudi Arabia Lowers October Oil Pricing
September 9, 2020
Crude prices closed down significantly in yesterday’s trading down roughly 6 to 7%. WTI crude oil settle down just over $3 dollar at $3.01. The rising cases of COVID-19 in the United Kingdom, Spain and several parts of the Unites State is causing many energy analysts to speculate on weakening global economic recovery and lower fuel demand.
The market was also helped lower by Saudi Arabia lowering its October official selling price for its Arab Light which essentially made WTI less attractive to Asian buyers.
The fact that no progress has been made on another round of stimulus money for COVID relied had the dollar index trading higher putting pressuring on commodities and equites.
The energy markets saw an increase in the volume of contracts traded on this big move lower and some technical damage has been done. With the big move lower yesterday, a near term bounce is possible but for now the highs are likely in place for medium term.
The market is also concerned about the ongoing tensions between the US and China. Reports say that the US is considering more sanctions on a Chinese chip maker and there is fear that if this happens China may retaliate. All the issues and concerns mentioned above helped to see the market trade lower and profits being taking. The market will continue to try and sort all this out and traders will be trying to see if this move lower is the start of a downtrend or if the market will again settle into a trading range and congest for the medium term.