Oil prices fell by around one per cent on Thursday, coming under pressure from sharp selloffs in global stock markets, with US stocks posting the biggest daily decline since 2011 to wipe out the year’s gains.
Front-month Brent crude oil futures LCOc1 were at $75.42 a barrel at 0043 GMT, 75 cents, or 1.0 per cent, below their last close.
US West Texas Intermediate (WTI) crude futures CLc1 were at $66.23 a barrel, 59 cents, or 0.9 per cent, below their last settlement.
“Oil prices fell under extreme selling pressure ... as the steep selloff across stock markets fueled fears over a possible drop in oil demand growth,” said Lukman Otunuga, analyst at futures brokerage FXTM.
Markets have been hit hard this month by a range of worries, including the Sino-US trade war, a rout in emerging market currencies, rising borrowing costs and bond yields, as well as economic concerns in Italy.
In oil, WTI has fallen nearly 10 per cent so far this month, while Brent is down nearly 9 per cent.
Still, oil markets remain nervous ahead of US sanctions against Iran’s crude exports, which kick in from Nov. 4.
Bowing to pressure from Washington, China’s oil-majors Sinopec and China National Petroleum Corp (CNPC) have not ordered any oil from Iran for November because of concerns that violating sanctions could impact their global operations.
According to Reuters news agency, China is Iran’s biggest oil customer. Halting oil Iranian imports means its many refiners will have to seek alternative supplies elsewhere.
Some relief could come from the United States, where crude production and storage levels are high.
US commercial crude oil stockpiles C-STK-T-EIA rose for a fifth consecutive week last week, increasing by 6.3 million barrels to 422.79 million barrels, the Energy Information Administration said on Wednesday.
Output C-OUT-T-EIA remained unchanged at 10.9 million barrels per day (bpd), slightly below a record 11.2 million bpd reached at the start of October.