Whether or not Monday morning’s falling price for crude oil is due to China’s gross domestic product report may be just a matter of interpretation. The Middle Kingdom’s third-quarter GDP growth came in at 6.9%, above the consensus estimate of 6.8% from economists, but below the country’s own estimate of 7%.
China has been buying crude oil to fill its strategic reserve, and there is naturally some concern that the government will slow or even stop the purchases if GDP doesn’t meet targets.
On the NYMEX, benchmark West Texas Intermediate (WTI) crude for December delivery traded down about 1.3% at $46.45, decently above its low of around $39 a barrel in mid-August, but well shy of the $80 or so that WTI was fetching a year ago. The December 2016 futures price stood at $51.61 a barrel Monday morning.
On the ICE, Brent crude for December delivery traded down about 2.46% at $49.25 a barrel, a differential of just $2.80 a barrel to WTI crude. The December 2016 futures price for a barrel of Brent crude is $55.75.
Monday’s downturn in WTI could just as easily be due to the switch to December as the near-month contract, with traders selling futures as prospects for a recovery in demand seem to be further away. When Halliburton reported earnings Monday morning, the company’s CEO declined to project an end to the weak pricing, but did say that when prices begin to rise again, the rise will be sharp.
Oil traders who are not market participants have been reducing exposure to the crude markets. In the week ended October 13, open interest among managed money investors (hedge funds) fell by nearly 30,000 contracts (one contract is equal to 1,000 barrels). A drop of 30 million barrels is not chump change; it represents about 15 VLCCs (very-large crude carriers).
Whether China is responsible for Monday’s downturn in the crude markets is arguable. It could just as easily be due to speculators following the lead of the hedge funders. Whatever the cause, there’s little doubt about the effect.
ALSO READ: 5 Big Oil and Gas Stocks Analysts Want You to Buy Now
100 Million Americans Are Missing This Crucial Retirement Tool
The thought of burdening your family with a financial disaster is most Americans’ nightmare. However, recent studies show that over 100 million Americans still don’t have proper life insurance in the event they pass away.
Life insurance can bring peace of mind – ensuring your loved ones are safeguarded against unforeseen expenses and debts. With premiums often lower than expected and a variety of plans tailored to different life stages and health conditions, securing a policy is more accessible than ever.
A quick, no-obligation quote can provide valuable insight into what’s available and what might best suit your family’s needs. Life insurance is a simple step you can take today to help secure peace of mind for your loved ones tomorrow.
Click here to learn how to get a quote in just a few minutes.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
