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Attentions in the oil market returned to the fundamentals and concerns about oversupply.
Crude prices have lost the froth of heightened risk premiums that immediately followed last Friday’s terrorist attacks.
Focus was instead on the upcoming US weekly crude inventory reports and global estimates for growing surpluses for the current year.
Brent crude dropped about 1% to change hands just above US$44 per barrel at around midday in London whilst West Texas Intermediary similarly fell 1% to US$41.35 a barrel.
Later this evening the American Petroleum Institute will provide the first of the weekly snapshots of the amount of American oil in storage. With such scrutiny on over-supply inventory stats have proved to be followed particularly closely.
This week’s stats will come against the backdrop of a shale industry that appears to be in decline.
Figures yesterday show that crude production in the state of North Dakota one of the shale hotspots fell year-on-year in the month of September. It is the first time this has happened in North Dakota in about 11 years.
The state produced 34.9mln barrels of oil in September 2015 versus 35.6mln a year before.
Anecdotal commentary suggests it is a pattern being replication through the main US shale territories.
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