Crude futures fell Monday as the market remained focused on demand growth concerns, and as Saudi Arabia said it has restored its production to more than 9.9 million b/d. NYMEX front-month crude settled $1.84 lower at $54.07/b, while ICE front-month Brent settled $1.13 lower at $60.78/b. The front-month, November, Brent contract expired Monday, which could have exacerbated a late-day sell-off, said Gene McGillian, Vice President of Tradition Energy. The December Brent contract settled $1.79 lower at $59.25/b.
In refined products, NYMEX front-month ULSD settled 3.60 cents lower at $1.9056/gal, and front-month RBOB settled 4.65 cents lower at $1.6049/gal. “The market seems to be really focused on the bearish factors,” such as “slowing economic growth,” said McGillian. On the macroeconomic front Monday, the Chicago Purchasing Manager Index fell to 47.1 in September, from 50.4 in August, according to the Institute for Supply Management.
The ISM cited a fall in business confidence and production, although reported a rise in labor demand. While the global economy continues to grow, it is growing at a slower pace, which is expected to dampen petroleum demand. S&P Global Ratings lowered its US GDP forecast for 2019 to 2.3% from 2.5%. “Rising unpredictability on the trade policy front is generating adverse effects on investment environment,” S&P Global analysts said in a report. The analysts also cited slower growth in the Asia-Pacific region.
“Investment activity has been particularly weak, suggesting that firms are delaying their capex plans partly due to uncertainty arising from US-China tensions,” the analysts said.