Do we have to fear for slow demand now that oil prices fell more than 1.5 percent?! U.S. West Texas Intermediate crude CLc1 settled down 97 cents or 1.96 percent to $48.59 a barrel. Brent crude futures LCOc1 were down 80 cents or 1.52 percent to $51.90 a barrel.
U.S. stock indexes fell sharply on Thursday, with the Dow and the Nasdaq posting triple-digit point declines, as investors fretted over escalating tensions between the U.S. and North Korea. The falling U.S. stock market translated to weakness in the oil market, that raised concerns about demand. The demand picture gets murky as stocks go down. Gold has stayed up so that confirms my suspicions it’s a fear trade.
On the supply side, Russian oil producer Gazprom Neft considers it "economically feasible" to resume production in mature fields after a global agreement among OPEC and non-OPEC countries expires, a representative of the company said. And while the Organization of the Petroleum Exporting Countries raised its outlook for oil demand in 2018 and cut its forecasts for output from rivals next year, yet another increase in the group's production suggested the market will remain in surplus despite efforts to limit supply.