WASHINGTON (DTN) -- The front-month contracts for West Texas Intermediate futures on the New York Mercantile Exchange and Brent on the Intercontinental Exchange nosedived on Tuesday, with heavy selling accelerated in late-afternoon trade after U.S. President Donald Trump ratcheted up rhetoric in the U.S.-China tariff war during a speech to the United Nations General Assembly.
NYMEX November WTI futures gave back $1.35 or 2.4% to settle at $57.29 barrel (bbl), while ICE November Brent dropped $1.67 or 2.6% to $63.10 bbl. NYMEX October ULSD futures retreated 2.94 cents to a $1.9676 gallon settlement, and the October RBOB contract fell 2.95 cents to end the session at a $1.6543 gallon 1-1/2 week low.
Early morning losses accelerated into an all-out selloff by the end of the session, driven mostly by concerns over progress in U.S.-China trade war and health of the economy. U.S. consumer confidence reading for September released this morning came in below the most bearish expectations, down 9.1 points to 125.1, which follows two consecutive declines in August and July. The conference board attributes the sharp decline to the protracted U.S.-China trade war and its effect on consumers' outlook for the domestic economy.
At the UN General Assembly, Trump offered little comfort to shaky markets after he accused China of currency manipulation and intellectual property theft.
"I will not accept a bad deal for American people," declared Trump at the annual gathering of world leaders in New York.
Following the speech, U.S. stock market dipped, dollar fell to intra-session low of 97.80 and oil prices deepened losses.
Oil futures were already in retreat earlier in the session after reports emerged Saudi Aramco restored 75% of shut-in oil production, suggesting the company is on track to bring back the full 5.7 million barrels per day (bpd) in production shut-in on schedule.
According to wire reports, crude production at the Abqaiq plant is currently at 3 million bpd while processing at the Khurais oil field has reached more than 1.3 million bpd.
Market participants now await the weekly rundown of supply figures on U.S. crude and petroleum stockpiles for the week ended Sept. 20. DTN expects U.S. crude oil inventories to have declined 1 million bbl last week, in line with the seasonal trend in which crude inventories typically decline during the last weeks of summer before rising again in late September and October during the refinery maintenance season. Gasoline stocks are seen to have increased 1.3 million bbl last week and distillate stocks to have declined by 1.2 million bbl.
American Petroleum Institute will publish estimates at 4:30 p.m. EDT, while U.S. Energy Information Administration is set to release official data 10:30 a.m. EDT Wednesday.
Liubov Georges can be reached at email@example.com
Copyright 2019 DTN/The Progressive Farmer. All rights reserved.