Prompt crude futures settled lower Tuesday amid a slew of bearish indications. November NYMEX WTI settled 45 cents lower at $53.62/b, while ICE December Brent settled 36 cents lower at $58.89/b. In products, NYMEX November ULSD settled 13 points higher at $1.8985/gal and November RBOB settled 72 points higher at $1.5737/gal. Manufacturing sector economic activity contracted in September, registering 47.8%, a 1.3 percentage point decrease from the August reading of 49.1%, according to the Institute for Supply Management report.
But the data comes at a particularly painful time for crude, which has all but run out of steam after the recovery of much of Saudi Arabian oil production affected by attacks two weeks ago. Further bearishness likely arose from Ecuador’s surprise announcement Tuesday that it would leave OPEC at the beginning of 2020 (See story, 1848 GMT). Ecuador produced just 530,000 b/d of oil in August, according to the latest S&P Global Platts OPEC survey, making it one of OPEC’s smallest producers.
“The decision lies in the internal issues and challenges that the country must assume, related to fiscal sustainability,” the ministry said in a statement. “This measure is aligned with the National Government’s plan to reduce public spending and generate new income.” Price Futures Group senior analyst Phil Flynn chalked Tuesday’s declines down to the weak ISM reading. “The manufacturing data was a slap in the face,” Phil Flynn, senior analyst at Price Futures Group, said. It was the worst report in ten years, sending stocks down about 200 points, Flynn said.
The Dow Jones index was down about 262 points shortly after the NYMEX settle.