Texas oil price drops 3% and closes at $78.36 a barrel

The price of Texas Intermediate Oil (WTI) closed on Wednesday 3% lower and settled at $78.36.

According to the end of trading data on the New York Mercantile Exchange (Nymex), West Texas Intermediate crude futures for December delivery were $2.40 from the previous session.

US benchmark oil was at its lowest price since early October due to the possibility that the United States and China would reduce strategic crude reserves.
“The official announcement could unleash more WTI sales to the $74 region,” Ed Moya, an analyst at OANDA, said in a note.

The downward movement occurred despite the sudden drop in national crude oil inventories by 2.1 million barrels, which was released today by the Energy Information Administration.

The International Energy Agency (IEA) yesterday published its monthly report and revised upwards its forecast for crude oil production in the fourth quarter, an increase of 330,000 barrels per day from what was expected.

The International Energy Agency considered that the increase in supply from the United States, which is larger than expected and will continue at a good pace in 2022, should help provide relief to the market.

“Rising production in the US and promised increases from OPEC+ threaten to cap the 17-month market deficit as demand increases,” said Louise Dixon, analyst at Rystad Energy.

On the other hand, natural gas contracts for December delivery fell 36 cents to $4.82 per thousand cubic feet, and gasoline contracts due in the same month fell 7 cents to $2.28 per gallon.