The two key crude oil benchmarks settled lower Monday amid fears of a potential supply glut.
A barrel of West Texas Intermediate (WTI) crude oil for December delivery lost 55 cents Monday to settle at $67.04. The light crude benchmark traded within a range from $66.67 to $67.95. The December Brent futures price posted a more gradual decline, falling 28 cents to settle at $77.34 a barrel.
As Bloomberg reported earlier Monday, traders contemplated an uncertain crude supply outlook as implementation of U.S. economic sanctions on Iran approaches. The Bloomberg article notes that Russia has suggested it may not cut its oil production to stave off a “potential supply shortage.” Moreover, it states that Saudi Arabia has indicated it could hike its output further. The article quotes a Saudi official as saying that the Kingdom and other OPEC members are in a “‘produce as much as you can mode.’”
Reformulated gasoline (RBOB) often follows the pattern of crude oil, but that was not the case Monday. November RBOB posted a modest increase, ending the day a penny higher to settle at $1.82 a gallon.
The settlement price for November Henry Hub natural gas was flat Monday at $3.185. During the early week session, the front-month contract bottomed out at $3.10 and peaked at just under $3.20.