Oil Stays Rangebound after Yet Another Weekly Drop

Crude-oil futures traded in a narrow price range on Monday with oversupply concerns still weighing on market sentiment.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in December CLZ4, +0.09% traded at $81.08 a barrel, up $0.01 in the Globex electronic session. December Brent crude LCOZ4, -0.26% on London’s ICE Futures exchange fell $0.13 to $86.00 a barrel.

Nymex West Texas Intermediate, the U.S. oil benchmark, has been down for four consecutive weeks, and Brent crude has posted losses for five weeks in a row.

Market participants continued to speculate about the level of oil production from members of the Organization of the Petroleum Exporting countries, especially Saudi Arabia.

In addition to Saudi Arabia’s crude-oil exports, the market also needs to consider the oil producer’s exports of petroleum products which are ramping up quickly, analyst Miswin Mahesh at Barclays said.

“Saudi Arabian refined product exports touched a record high of 1.02 million barrels a day” in August on the back of two newly-started oil refineries, Mr. Mahesh said.

For the rest of this week, financial markets will be focused on U.S. economic data and the U.S. Federal Reserve’s decision on its quantitative easing policy.

The strength of the U.S. dollar compared to other currencies would affect crude oil demand, analyst Daniel Ang at Phillip Futures said. “Considering the events in the week ahead, we expect to see the theme of this week’s crude prices to come from changes in the dollar index,” he added.

Nymex reformulated gasoline blendstock for November CLZ4, +0.09% –the benchmark gasoline contract–fell 9 points to $2.1808 a gallon, while November diesel traded at $2.4787, 32 points lower.

ICE gasoil for November changed hands at $736.75 a metric ton, up $1.25 from Friday’s settlement.

Source: MarketWatch