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Petroleum industry

Crude Oil Prices Plummet Below $23/Barrel Amid OPEC Concerns

Strategic Insights

— 1 min read

The price of crude oil took a significant hit on Thursday, falling below $23/barrel in New York as traders grew increasingly worried about OPEC's future plans for production. November light, sweet crude plummeted 82 cents to $22.45/barrel, marking the third substantial loss in four sessions on the New York Mercantile Exchange (Nymex). The market's concern was sparked by new surveys indicating that OPEC compliance in September was lower than in August, ranging from 82% to 84%. Traders are also anxious about a late-November meeting of oil ministers from Saudi Arabia, Venezuela, and Mexico.

Key Takeaways:

  • Crude oil prices fell below $23/barrel in New York, with November light, sweet crude plummeting 82 cents to $22.45/barrel.
  • OPEC compliance in September was lower than in August, ranging from 82% to 84%, according to new surveys.
  • Traders are concerned about a late-November meeting of oil ministers from Saudi Arabia, Venezuela, and Mexico.
  • Mexican Energy Secretary Luis Tellez and Venezuelan Energy Minister Ali Rodriguez attempted to reassure the market that output cuts would not be revised at the meeting.
  • Despite the loss, crude did not fall below $23.35/barrel, indicating that the market is not ready to collapse.
  • Victor Yu, vice president at Refco Inc., placed the next support areas for crude at $22.20 or $22.25.
  • Nymex gasoline prices tumbled 2.53 cents, closing at 62.76 cents/gallon, as traders reacted to the inventory build reported Wednesday.
  • November heating oil prices dropped 1.97 cents to 57.46 cents/gallon, mirroring the decline in crude oil.
  • Russia's decision to limit fuel oil exports had no significant impact on prices.

Statistics:

  • Crude oil prices fell by 82 cents to $22.45/barrel in New York.
  • OPEC compliance in September ranged from 82% to 84%, lower than in August.
  • Traders lost almost 4 cents/gallon in gasoline prices over the past two sessions.
  • November heating oil prices dropped 1.97 cents to 57.46 cents/gallon.
  • Nymex gasoline prices tumbled 2.53 cents to 62.76 cents/gallon.
  • The Nymex Henry Hub November contract rose 4.1 cents to settle at $2.642/MMBtu.

Sources:

  • Crude World
  • The New York Mercantile Exchange (Nymex)
  • Refco Inc.
  • Natural Gas Week
  • The Oil Daily

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