Oil prices rise after 6% plunge, but market on edge

21 November, 2018, 15:13 | Author: Sally Reid
  • Oil falls after Russia preaches patience rather than production cuts

Crude oil prices were lower Monday morning at the start of a holiday-shortened week that will see reduced volume as traders and investors tested recent lows, and also as the front-month WTI contract was set to move January.

Fund managers cut their bullish exposure to crude futures and options to the lowest since around mid-2017 this month.

West Texas Intermediate for January delivery sank $3.98 to $53.22 a barrel on the New York Mercantile Exchange at 13:38 local time. The global benchmark fell as much as 7.6 per cent to US$61.71 during the session, the lowest since December 2017.

Tuesday's drop extended a slide that has been largely unimpeded since early October. WTI prices are more 30 per cent lower from near four-year peaks hit in early October, weighed down by surging supply and the selloff in risk assets worldwide. The global benchmark crude traded at a $9.11 premium to WTI for the same month.

Further dragging on the oil outlook, OPEC and other forecasters have signaled that the global oil market could produce a surplus in 2019 on slowing demand, despite a dip in Iranian oil exports after USA sanctions recently went into effect.

Traders see further downside risk to oil prices from growing USA shale production and a deteriorating economic outlook.

Amid the uncertainty, financial traders have become wary of oil markets, seeing further downside risk to prices from the growth in US shale production as well as the deteriorating economic outlook.

Oil prices plummeted on Tuesday, as U.S. President Donald Trump reaffirmed Saudi Arabia as "a great ally" and signaled it won't punish Saudi crown prince over journalist Jamal Khashoggi's killing.

Zuckerberg orders Facebook execs to use Android after Cook remarks
A separate advisor to Soros is reportedly calling for Facebook to investigate the company's PR and lobbying work. According to her, looking into the Russian activity without approval had left the company exposed legally.

"The main trend remains bearish as investors no longer believe in a risk of supply tightness for crude", ActivTrades chief analyst Carlo Alberto De Casa said.

Meanwhile, production is at or close to record highs in the US, Russia and Saudi Arabia.

US crude stockpiles have grown for eight straight weeks, and data last week showed inventories swelled by the most in more than a year, weighing on the market.

"While the news that OPEC+ said it would cut 1.4 million barrels of oil per day from production, it's looking likely that the cuts will have to be deeper in order to stabilise the price".

The Organization of the Petroleum Exporting Countries is pushing for a supply cut of 1 million bpd to 1.4 million bpd when it meets on December 6.

Russian Energy Minister Alexander Novak said Monday that the country and its OPEC allies need to watch the oil market in the coming weeks before making any decisions to reduce output.

If suppliers produce more oil than is needed, they are forced to cut their costs.

"We are entering an unprecedented period of uncertainty in oil markets", IEA Executive Director Fatih Birol said on Tuesday.

Recommended:



Popular

Crypto Selloff Takes Bitcoin Below $5,000
Since last week the market has shed 23% from total capitalisation - a staggering $50 billion (£39bn) - to around $163bn (£126bn). Many believe this is what triggered the sudden drop in the value of bitcoin and other cryptocurrencies on November 14.

Tekashi 6ix9ine Arrested By The Feds On Racketeering Charges
The rapper has been among the most ascendant and controversial names in hip-hop in recent months. His debut album, Day69, is among the most downloaded records on iTunes.

Charles enjoys giggles with grandson George as family photos mark 70th birthday
Because of her marriage to the British Prince, both the Duke and Duchess of Sussex tax returns to the U.S. are being looked into. The diamond engagement ring Prince Harry gave Meghan has been valued at over £71,600 ($133,000 NZD) by royal watchers.

Palestinians denounce 'normalisation' in latest Gaza protest
The decision came after Netanyahu rejected Bennett's demand to be made Defence Minister at the meeting, the report said. Gaza militants fired 460 rockets into Israel, while the Israeli air force struck 160 targets in Gaza.

Donald Trump and Emmanuel Macron: best of enemies
He said he wanted to reduce Europe's dependence on the United States and U.S. weapons for its own security. She also said that Trump wasn't there because he didn't want to disrupt the traffic in Paris .

Google Rolls Out 'Night Sight' Camera Mode for Pixel Smartphones
Google Assistant will take those instructions and play the messages the user wants played whenever someone calls. 100GB data However, the move may annoy some users who simply don't want Night Mode enabled, but do want to use Battery Saver.

Number of missing in California fire doubles to more than 600
In a post on Twitter, she says her family has "found our answer" and asks for prayers as they get through this "very hard time". Scientists largely attribute the devastating blazes to climate change which has caused a prolonged drought in the state.

Trump Unleashes New Attacks on Russia Probe
He wasn't close to done: "These are Angry People, including the highly conflicted Bob Mueller, who worked for Obama for 8 years". Whitaker is now overseeing the Mueller probe, which had previously been overseen by Deputy Attorney General Rod Rosenstein.

Celebrities offer thanks, condolences in death of Stan Lee
In a statement The Walt Disney Company, which bought Marvel Entertainment in 2009, saluted Mr Lee's "unmatchable" life and career. The dapper, friendly comic book genius continued to work into his 90s on numerous projects, including comics, films and DVDs.

Democrats flip Arizona US Senate seat with Sinema victory
Annette Villelas was one of those angry voters. "The way he talks just to the public, it's not right", Villelas said. The upheaval comes as Arizona, long a Republican bastion, emerges as a swing state in presidential elections.