NYMEX crude trades in a narrow range above $66 per barrel after a sharp 4.2% decline yesterday when it hit a low of $65.74/bbl, the lowest level since August 21.
Crude hit 2-month low weighed down by Saudi's promise to raise output, expectations of another increase in US crude oil stocks and demand concerns amid sell-off in equity market.
Saudi Arabia's energy minister said Tuesday that OPEC is in "produce as much as you can mode" to meet demand and replace any looming shortages. The kingdom has already boosted oil production to 10.7 million barrels a day, near an all-time high, and it can increase it even more to help plug any supply shortfalls due to U.S. sanctions against Iran's energy industry
The weekly report by American Petroleum Institute (API) noted a 9.88 million barrels increase in US crude oil stocks as against market expectations of 3.5 million barrels increase. Focus now will be on US EIA weekly report due today at 2000 IST. Apart from stocks, focus will be on US crude production which stands near record high level.
US equity market has corrected over 8% from record high level set in early October. Weighing on market sentiment are concerns about higher interest rate and import tariffs on US companies, Chinese economic slowdown, Brexit impasse and Italy budget crisis