DTN Oil

WASHINGTON (DTN) -- Nearby-delivery oil futures on the New York Mercantile Exchange and the Brent contract on the Intercontinental Exchange settled Thursday's session mostly lower. The losses came after the world's top oil exporter, Saudi Aramco, lowered its official selling price for its benchmark crude to Asia and the United States next month as surging coronavirus cases and softer economic growth keeps a lid on global demand recovery in the fourth quarter.

The pricing of Saudi crude benchmark Arab Light typically sets the trend for pricing by other Gulf oil producers such as the United Arab Emirates, Kuwait, Iraq and affects as much as 12 million barrels per day (bpd) of Middle Eastern crude grades. Saudi state oil giant also lowered its benchmark prices for the United States, signaling softening demand recovery in the world's largest oil consumer.

This week's inventory data from the U.S. Energy Information Administration showed gasoline supplied to the U.S. market, a measure for demand, declined 209,000 bpd from the previous week to 8.336 million bpd, widening its year-on-year deficit to 8.8%.

New coronavirus infections surged to above 100,000 a day in the United States this week, with cases likely to trend higher in the coming weeks.

"This COVID wave seems larger and more widespread," said Federal Reserve Chairman Jerome Powell following the conclusion of a two-day policy meeting on Thursday.

As expected, the central bank kept monetary policy in a holding pattern, leaving interest rates near zero and making no change to asset purchases, as the final results of U.S. presidential and congressional elections remain uncertain.

The latest vote count suggests Republicans have retained control of the U.S. Senate, while the Democrats will hold a slim majority in the House of Representatives, with former Vice President Joe Biden closing in on his bid for the White House. President Donald Trump has voiced concern over the integrity of vote counting in several states and has deployed lawyers, which suggests the outcome of the election might still be days away.

On the economic data front, initial unemployment claims remained mostly unchanged during the week ended Oct. 31 at 751,000, suggesting layoffs might have stabilized in recent weeks, although at elevated levels. Continued claims, meaning the number of people collecting unemployment benefits for consecutive weeks, were down 538,000 from the prior week's revised levels, although came in above expectations at 7.285 million.

On Friday, the U.S. Labor Department will release monthly nonfarm payrolls report for October, which is expected to show a gain of 600,000 new jobs, down 61,000 from September, while the unemployment rate is seen slipping 0.2% to 7.7%.

On the session, NYMEX December West Texas Intermediate futures slipped 36 cents to settle at $38.79 per barrel (bbl), and the January Brent contract on ICE eased 30 cents to $40.93 per bbl. NYMEX December ULSD futures settled little changed at $1.1696 gallon, and the December RBOB contract added 0.78 cent to $1.1159 gallon.

Liubov Georges can be reached at liubov.georges@dtn.com

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