Oil prices witnessed a drop on Monday. It happened after China’s release of diesel and gasoline reserves weed out the concerns over global tight supply. Moreover, investors cashed it in ahead of a meeting to be held on November 4. Major crude producers will meet that will help in knowing whether the future production targets are increased or not.
Meanwhile, the WTI (the US West Texas Intermediate) crude futures dropped 40 cents to USD 83.17 or 0.5 per cent. It rose 76 cents on Friday.
The reduction came after China stated in a rarest official statement that it released two fuels’ reserves to push the support price stability and supply in some regions.
Sunward Trading, chief analyst, Chiyoki Chen said that China’s selling of fuel reserves was behind the selling. It exhibited the intention of Beijing to stabilise the rates.
All sights remain on the November 4 meeting of the OPEC and OPEC+. Interestingly, analysts are expecting better production, which may see a rise of 400,000 BPD of supply in December 2021.
Meanwhile, the US crude futures of the net long was cut by money managers. In the week to October 26.
Last week, the oil went multi years high. OPEC+ helped it to rally that peak for maintaining the planned output. However, it did not raise global supply concerns.
Meanwhile, bolstered by rising oil prices, the US energy firms added natural gas and rigs for the fifteenth consecutive time in a row. It took it to the highest since April 2020.