Crude oil futures fell during mid-morning trade in Asia Friday as investors adopted a risk-adverse stance while awaiting more clarity on the impeachment inquiry into US President Donald Trump. In addition, market analysts noted the swift production recovery in Saudi Arabia following the September 14 attacks has helped to tame fears of supply constraints.
At 11:08 am in Singapore (0308 GMT), ICE Brent November crude futures fell 58 cents/b (0.92%) from Thursday’s settle to $62.16/b, while the front-month NYMEX November light sweet crude futures contract echoed similar weakness, edging lower by 31 cents/b (0.55%) at $56.10/b. “A lack of market-moving headlines and no doubt, a lot of frayed nerves,” OANDA analysts said in a note Friday.
On Tuesday, US House Speaker Nancy Pelosi said that the US House of Representatives would launch a formal impeachment inquiry against President Donald Trump. The announcement came amid an anonymous report that alleged Trump to have abused his powers during his presidency and sought help from a foreign government to undermine former Vice President Joe Biden, the current Democratic frontrunner, and help his own re-election.
It also accused the White House of attempting to cover up the contents of this phone call. The political headlines came at a time when fears of slowing economic growth and demand reignited, against a backdrop of China-US trade tensions. Meanwhile on the supply front, oil field flaring activity detected in satellite imagery indicates Saudi Arabia’s production capacity has returned to normal, according to geospatial intelligence firm Ursa Space Systems.
“Oil bulls have been discouraged by quicker-than-expected return of Saudi oil output,” Stephen Innes, APAC Market Strategist at AxiTrader, said in a note.