There has been a major reversal in the condition of the oil market by virtue of crude futures nullifying the profits for this year after they reached the highest values since 2014 only 6 weeks ago.
This dip indicates a basic change in the attitudes towards the oil priced. Exactly a month ago, the traders were worried about oil shortage that could take the crude futures to nearly 100 dollars per barrel. However, now the supply is likely to push down the demand at the beginning of 2019.
Consequently, oil prices are facing a dip of more than $20 per barrel since the beginning of October. This started when Brent Crude went as high as $87 per barrel and US crude sold at just a little less than $77.
This has led to both these benchmarks trading in the bear market zone after a dip of more than 20% from their 52-week high prices.
If the root of this correction is to be analyzed, it lies clearly even in the most recent hikes. At the highest point of the rally, there were opinions from many energy analysts regarding why the prices should have never gone up so swiftly.
He 4-year highs in Crude futures were encountered on Oct 3 when the market braced itself for the replenished US sanctions on Iran. Sanction threats cleared off nearly 800000 barrels per day from the market owing to the constant threats of sanctions and thus fueled suspicions that some oil importers may not get supplies.