Morning Market Overview
Oil futures nearest delivery on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange were mostly mixed in early trading Wednesday following Tuesday’s mostly down day, with the upside spurred by reports suggesting Russia and Saudi Arabia are discussing reducing oil production in 2019, which follows steep losses by global and U.S. crude futures. On Tuesday, NYMEX West Texas Intermediate futures hit bear market territory, sliding 20% from the Oct. 3 $76.90 four-year high to $61.31 Tuesday, a seven-month low.
Over the same period, Brent crude dropped 18% from $86.74, also a four-year high, to an 11-week low Tuesday at $71.18. Oil futures have sold off so far in the fourth quarter on a wave of new supply, which prompted the Energy Information Administration to revise higher world oil production for this year up 1.22 million bpd to 100.09 million bpd in their Short-term Energy Outlook released Tuesday from one month earlier. Part of the revised increase was an EIA reassessment of U.S. crude output, prompting a 400,000 bpd adjustment to the outlook for domestic crude production to 11.4 million bpd.
Meanwhile, the International Energy Agency expects world oil demand to drop from a record high 100.2 million bpd in the current fourth quarter to 98.9 million bpd in the cyclically weak first quarter of next year.