{"id":199813,"date":"2023-12-06T10:15:00","date_gmt":"2023-12-06T15:15:00","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=199813"},"modified":"2023-12-06T13:14:11","modified_gmt":"2023-12-06T18:14:11","slug":"oil-enters-bear-market-as-crude-prices-slump-to-five-month-low","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/commodities\/oil-enters-bear-market-as-crude-prices-slump-to-five-month-low\/","title":{"rendered":"Oil Enters Bear Market As Crude Prices Slump To Five-Month Low"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\" id=\"h-zinger-key-points\">ZINGER KEY POINTS<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Oil prices hit five-month lows, Brent enters bear market after 21.9% drop.<\/li>\n\n\n\n<li>OPEC+ production cut doubts and slowing global economy cloud oil demand outlook.<\/li>\n<\/ul>\n\n\n\n<p><strong>Oil prices<\/strong>&nbsp;fell to five-month lows on Wednesday following four straight days of declines as traders remained wary that&nbsp;<a href=\"https:\/\/www.benzinga.com\/trading-ideas\/23\/12\/36072513\/brent-does-not-believe-opec\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>OPEC+<\/strong>&nbsp;production cuts<\/a>&nbsp;would have sufficient impact to offset any loss in demand from a global economic slowdown.<\/p>\n\n\n\n<p><strong>Brent crude<\/strong>&nbsp;fell 0.8% in early trading on Wednesday to $76.55 a barrel, its lowest mark since July 10 when prices were rallying. Brent peaked at nearly $98 in September and has since fallen 21.9% \u2014 a fall of more than 20% from its most recent peak puts Brent into bear market territory.<\/p>\n\n\n\n<p><strong>Nymex West Texas Intermediate<\/strong>&nbsp;was on a similar trajectory, down 0.8% to $71.74 on Wednesday \u2014 its lowest since July 7 \u2014 and down 24.5% since its $95 peak on Sept. 28.<\/p>\n\n\n\n<p>The&nbsp;<strong>United States Oil Fund&nbsp;<\/strong>the most liquid exchange traded fund that tracks oil prices, was down 1.3% to $67.58 on Wednesday, putting it 18.9% lower since its most recent peak of $83.29 on September 27.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">OPEC+ Quota Cuts Vs. Oversupply<\/h2>\n\n\n\n<p>After some volatility in the past two weeks ahead of&nbsp;<a href=\"https:\/\/www.benzinga.com\/news\/23\/11\/36026502\/opec-said-to-have-approaching-preliminary-agreement-for-deeper-oil-production-cuts-for-next-year\" target=\"_blank\" rel=\"noreferrer noopener\">last week\u2019s OPEC+ meeting<\/a>, oil prices have been tracking lower. Although the oil cartel and its allies decided on additional cuts in output, oil traders are in some doubt the curbs will make much difference to market supply.<\/p>\n\n\n\n<p>\u201cOPEC+ has been unable to agree on group-wide cuts,\u201d said&nbsp;<strong>Warren Patterson<\/strong>, head of commodities strategy at ING.<\/p>\n\n\n\n<p>\u201cInstead, we are seeing voluntary cuts from a handful of members. Clearly, given the scale of cuts we are already seeing from the group, it is becoming increasingly more difficult for some members to stomach further cuts.\u201d<\/p>\n\n\n\n<p>Ahead of last week\u2019s meeting, the cartel was settling a&nbsp;<a href=\"https:\/\/www.benzinga.com\/news\/23\/11\/35957561\/oil-prices-dip-as-opec-showdown-over-african-quota-dispute-fuels-market-uncertainty\" target=\"_blank\" rel=\"noreferrer noopener\">dispute with African members&nbsp;<strong>Angola<\/strong>&nbsp;and&nbsp;<strong>Nigeria<\/strong><\/a>&nbsp;\u2014 both of which were unhappy about their quota levels.<\/p>\n\n\n\n<p>A big mover of the needle on oil prices recently have been data showing growth in U.S. oil stockpiles. Weekly inventory data gathered by the Energy Information Administration showed that in the week of Nov. 24, oil stocks grew by 1.61 million barrels, beating expectations, and following a massive build of 8.7 million barrels in the previous week.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Slowing Economic Growth Clouds Demand Outlook<\/h2>\n\n\n\n<p>On the demand side, much uncertainty remains over the state of the global economy. In the U.S. and Europe there are already signs of slowing economic growth, but China is looking to rebuild its economy to help shift the focus from its ailing property sector.<\/p>\n\n\n\n<p>\u201cChina, which expected to be behind the bulk of demand growth next year. Over 60% of oil demand growth is expected to come from the country next year,\u201d said Patterson. \u201cMeanwhile, Europe and the Americas are expected to see a small decline in demand next year amid weaker economic growth.\u201d<\/p>\n\n\n\n<p>&#8212;<\/p>\n\n\n\n<p>Originally Posted December 6, 2023 &#8211; <a href=\"https:\/\/www.benzinga.com\/news\/23\/12\/36112158\/oil-enters-bear-market-as-crude-prices-slump-to-five-month-low\">Oil Enters Bear Market As Crude Prices Slump To Five-Month Low<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Oil prices hit five-month lows, Brent enters bear market after 21.9% drop. OPEC+ production cut doubts and slowing global economy cloud oil demand outlook.<\/p>\n","protected":false},"author":1278,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21,6,8,9,26,3],"tags":[147,1056,40],"contributors-categories":[13584],"class_list":{"0":"post-199813","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-commodities","7":"category-north-america","8":"category-region","9":"category-securities","10":"category-text-articles","11":"category-traders-insight","12":"tag-commodities","13":"tag-crude-oil","14":"tag-oil","15":"contributors-categories-benzinga"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Oil Enters Bear Market As Crude Prices Slump To Five-Month Low<\/title>\n<meta name=\"description\" content=\"Oil prices hit five-month lows, Brent enters bear market after 21.9% drop. 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