Oil tumbles on risk aversion as Q4 starts; bulls look to OPEC By Investing.com

Worries that inflation will rear its ugly head again to suppress demand in almost everything set off a wave of risk aversion on Monday that handed global markets an ominous start to the fourth quarter.On the crude oil front, New York-traded West Texas Intermediate, or WTI, and London’s Brent fell about 1% each, extending similar losses from Friday. The two crude benchmarks had risen nearly 30% in the third quarter, threatening a new round of chaos to economies in non-oil producing countries.

The Saudis and Russians pledged last month to cut at least 1.3 million barrels per day of their regular production until the end of the year, in what many believe was a bid to bring crude back to $100 a barrel or more. U.S.

There is also the notion, especially among the Saudis, that they need to protect market share for their oil with the current high prices for a barrel that expose them to risk of under-cutting by their allies, including the Russians. Indeed, a durable recovery in China's economy is being delayed by a property slump, falling exports and high youth unemployment, raising fears of weaker fuel demand.Thus, the Saudis might need to produce more in October — not the same of what they pumped in September and certainly not less — to keep China, India and other important customers happy.

But Russia, which has committed to the Saudi production squeeze plan by announcing a 300,000-barrel per day cut of its own, is also under pressure to keep up with deliveries promised to customers.Moscow recently eased its separate ban on fuel exports introduced to stabilize the domestic market. Analysts do not expect those restrictions to stay for long because they may hit refinery runs and impact relations with customers.

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