Crude oil prices sold off almost 5% on what many people attributed to a story that some unnamed Russian oil company source said that Russia was against a production cut. Today those sources are still unknown, but really the sell-off in oil probably had more to do with the fact that Saudi Arabia cut prices to Asia as the kingdom was losing market share to Iraq and Iran that has been raising output and taking away business from the Saudis.
Crude oil prices are on the rise as Libya’s state-run National Oil Corp. declares a force majeure on loadings of Sharara crude from the Zawiya oil terminal and on loadings of Wafa field condensate from the Mellitah terminal and drop-in oil inventory at the Cushing, Okla., Nymex delivery point.
More signs of a slowdown in the Chinese economy may not be enough to overcome a potential slowdown in U.S. oil output. The preliminary Caixin/Markit China Manufacturing Purchasing Managers' Index fell to 47.0 in September, its lowest since March 2009 yet only down slightly from last month. The weakness was well telegraphed by other readings but how well telegraphed was the drop in U.S. oil inventories?
Effective September 15, 2014, The Chicago Mercantile Exchange, Inc. (CME), the Board of Trade of the City of Chicago, Inc. (CBOT), the New York Mercantile Exchange, Inc. (NYMEX), and the Commodity Exchange, Inc. (COMEX), notified the Commodity Futures Trading Commission (CFTC) of the adoption of Rule 575 (“Disruptive Practices Prohibited”).
For oil, despite yesterday's tipper taper rally parade the market still has to overcome the fact that supply in the U.S. is overwhelming. Brent crude, though, is a bit more delicate and led the rally higher.