Today’s market seems to be a puppet whose strings are being pulled by the world. Several world economic factors are influencing the current price of crude. China’s economy grew 6.9% in the third quarter, which is the lowest rate in nearly six years. China, who represents 16.7% of global GDP, is the largest manufacturing power in the world and imports the most crude oil. China's weakening economy has decreased its demand for oil, especially from Saudi Arabia. In the month of May, Russian exports of crude oil surpassed Saudi exports into China for the first time in history, sparking a ruthless price war for market share. This morning’s fall in oil prices seems to be a reflection of the concerns about China’s growth, or lack thereof.
Additionally, during the Sunday kickoff of the Oil and Energy Conference in Tehran, Iran, Roknoddin Javadi, the Iranian Deputy Oil Minister was reported saying that “a 500,000 barrels a day increase in Iran’s oil production will take place in less than a week after the lifting of sanctions.” This will enable Iran to raise exports by 1 million barrels a day within six months of the sanctions' removal, with a target crude production level of 4.7 million barrels a day by March of 2021.
As of this morning, WTI crude is down $1.05 to $46.21, RBOB is down $0.0548 to $1.2732 and heating oil is down $0.0348 to $1.4618.