- WTI crude oil was down 3.78% to $66.11 per barrel on Tuesday morning.
- Brent crude prices fell below $70 a barrel for the first time since 2021.
- The fundamentals have not changed enough to justify a big price drop.
Oil prices fell again on Tuesday, dropping more than 3% in a single day, suggesting either a dramatic shift in fundamentals or geopolitical tensions in the oil-rich Middle East. But neither has happened, at least today.
By 10:30 a.m. EDT on Tuesday, the price of a barrel of Brent crude oil had fallen $2.33 (-3.24%) to $69.51, its lowest price in years, while WTI crude oil had fallen $2.60 (-3.78%) to $66.11 per barrel.
But there are no fundamental changes that would justify such a drop in prices. Neither the API nor the EIA have released numbers. The United States, the world's largest oil consumer, has not released any significant economic data, for better or worse.
The only relevant data measure released today was Reuters customs clearance data on Chinese exports, which grew sharply in August as manufacturers moved to avoid upcoming tariffs. Meanwhile, Chinese imports disappointingly grew just 0.5% instead of the expected 2% increase, slower than the previous month.
Later today, the American Petroleum Institute will release its forecast for U.S. crude oil and crude product inventory trends. Tomorrow, the Energy Information Administration will release a similar forecast.
Brent crude is currently down $4 compared to this time last week, while WTI crude is down $4 week-on-week.
Earlier this week, Morgan Stanley lowered its Brent crude price forecast for the second time in two weeks, now expecting prices to average $75 a barrel in the fourth quarter. This is a sharp downward revision from its August fourth-quarter forecast of $80, comparing Brent crude price trends to “other periods of significantly weaker demand.”
Article by Julianne Geiger of Oilprice.com
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