Brent and West Texas Intermediate crudes are poised for the lowest close in more than five years after Saudi Arabia offered its oil customers in Asia the biggest discount on record, signaling it’s defending market share.
West Texas Intermediate crude fell below $80 a barrel for the first time since June 2012 amid speculation rising U.S. supplies are exacerbating a global glut. Brent fell to the lowest level in almost four years.
Oil is trying to ignore geopolitical headlines. While Israel and Hamas agreed to a 72-hour cease-fire in Gaza easing momentum, yesterday’s report of Russia adding battalions near the border with Ukraine and conducting war games by the border is creating unease.
Should $100 oil be forgot and never brought to mind? Oil made one last attempt to go above $100 a barrel but backed off as we end the year. It was a year that saw a surge in U.S. oil production and record natural gas production.
Oil has found new life after reports showed that oil supply could actually fall. The Energy Information Administration destroyed that myth after it reported that U.S. crude supply fell by 5.6 million barrels.
Commodities are getting crushed as strong U.S. data increase the odds that the Federal Reserve is getting closer to "The Great Taper." The impact of QE on commodities is most clear when the Fed says that the party is going to end.