Oil posts worst monthly decline since July 2016 on rising uncertainty

Crude oil prices continued downward trend on Thursday, as uncertainties over global demand growth and rising stockpiles weighed on investor sentiment, even as the sanctions on Iran will go into effect in a few days on Nov. 4.

By 10:00 am Riyadh local time, Brent Crude futures were down 0.58 percent to $75.47 a barrel, while WTI crude futures were down by 0.43 percent to $65.03 a barrel.

On Wednesday, WTI crude oil fell to $65.31 (down 10.8 percent in October) while Brent declined to $75.47 a barrel (dipping 9 percent in October), posting their worst monthly performance since July 2016.

Rising uncertainty over global demand growth and a large build in oil stocks knocked back confidence in the oil market despite Iranian oil sanctions beginning formally in early November, noted the latest edition of the monthly chartbook by Saudi Arabia’s Jadwa Investment on Thursday.

“Despite both Brent and WTI oil prices rising to their highest monthly average in four years in October, at $82 a barrel and $71 a barrel respectively, this hid the fact that both benchmarks declined in the second half of the month, Fahad Alturki, Chief Economist and Head of Research, Jadwa Investment, noted in the report.

There is rising uncertainty over global demand growth, with OPEC reducing outlook for 2018 oil demand by 100 thousand barrels per day since its July report. Moreover, a large build in US commercial oil stocks has also dampened the outlook for the WTI benchmark, the report added.