Oil Prices Down 4th Day On Supply-Demand Pressures

SECAUCUS, NJ (DTN) – Oil markets slid for a fourth straight day on Monday (9/22) after being stuck in a narrow range on a combination of factors that were mostly bearish .

In crude oil, NYMEX-traded WTI for October delivery dropped $0.04 to $62.64 bbl, while ICE Brent for November delivery fell $0.11 to $66.57 bbl.

Among oil products, the front-month ULSD contract retreated $0.0066 to $2.2923 gallon.

Only gasoline bucked the broadly lower trend of the oil complex, with October RBOB futures gaining $0.0075 to $1.9782 gallon.

The U.S. dollar index eased by 0.30 points to 96.98.

The uncertain demand outlook for oil also stems from a mix of factors, including central bank interest rate hikes aimed at cooling inflation.

On the supply side, geopolitical tensions continued to simmer, providing some upward price pressure. Ukraine claimed it had carried out strikes on Russian oil infrastructure over the weekend, including damage to pumping stations on a major crude pipeline.

The attacks follow earlier reported strikes on Russian refineries, as Kyiv intensified its drone campaign in recent weeks.

The European Union, meanwhile, continued preparations for a round of redesigned sanctions against Russia to target entities in third countries facilitating Moscow’s oil exports.

The Trump administration, which practically forced the EU to design the sanctions, hopes to impact the ability of major buyers as well like China and India to access discounted Russian crude.

The supply-side risks have, however, been offset thus far by concerns about potential demand destruction for oil amid growing economic headwinds.

Iraq, OPEC’s second-largest producer, has ramped up its crude exports in recent months under the group’s production agreement, adding to the sense of ample global supply. Kuwait also signaled that its oil production capacity had reached a more than 10-year high, further fueling worries about a looming supply surplus.

With the market caught in a tug-of-war — geopolitical risks providing support while demand worries and ample supply weigh on sentiment — prices could continue treading water in the near-term.