Oil Traders Pulling Out Of Contract
Dvinz Oil & Gas,S.A
Oil Suppliers, Oil Prices, Oil Traders
Dvinz Oil & Gas,S.A - Oil prices tumbled by about 3 percent Tuesday after reports that OPEC production is surging higher than expected, slow manufacturing growth in China and Japan and the EU is dampening demand for oil, and traders are pulling out of contracts at the end of the quarter as the dollar reaches multiyear highs.
Oil Prices Tumble On High Dollar:
Brent crude prices, the benchmark international price, fell about 2.5 percent from $94.74 per barrel Tuesday morning to $94.24 midmorning before inching back up to $94.67 by midafternoon. Last week, Brent crude prices both rose and fell, but the trend has been downward for three months, falling 16 percent. U.S. oil prices slid the most in 17 months on Tuesday, by nearly 4 percent to $91.27 midafternoon. West Texas Intermediate crude has lost 13 percent this quarter, the most since June 2012.
The oil supply of the Organization of the Petroleum Exporting Countries, which supplies a third of the world’s oil, rose to its highest in nearly two years this month, a Reuters survey found, as Saudi Arabia and especially Libya have increased production by 810,000 barrels per day. Libya increased production by 280,000 barrels a day, followed by Saudi Arabia, Angola, Nigeria and even Iraq, despite fighting in Iraq and Libya that threatens oil supplies and transport.
Manufacturing indices published this week showed factory activity expanded at a slow pace in China and Japan and slowed down in the EU in September.
And at the end of each three-month quarter, it’s common for hedge funds to pull money out of the market. This quarter in particular, traders are pulling out because the dollar is at four-year highs against foreign currencies. A high dollar weighs down crude prices because oil is measured worldwide in dollars, and when the dollar strengthens, oil becomes more expensive for buyers using foreign currencies, suppressing demand.
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