Oil Selloff Continues, $60 Support Looks Fragile

© Reuters.  Oil headed for 9th day of losses, biggest losing streak since 2014.© Reuters. headed for 9th day of losses, biggest losing streak since 2014.

Investing.com – Is $60 oil on its last legs before OPEC comes to save the day for the bulls?

The front-month contract in U.S. West Texas Intermediate came less than $1 to breaking the $60 per barrel support in Thursday’s session as the tumble in crude futures continued a ninth-straight day, priming the market for its worst losing streak in more than four years.

Technically in a bear market after losing 20% from the highs of early October, the selloff in oil seems unstoppable despite OPEC’s rumblings on Wednesday that might join Russia to cut output as early as next month to put a floor beneath the market.

Instead, traders seemed fixated on the new weekly record high of 11.6 million barrels per day in U.S. crude production cited by the Energy Information Administration. The EIA, which delivered that data on Wednesday, also announced a seventh-straight weekly rise in U.S. crude , of which six have been outsize builds.

Article continues below Advertisement...

Compounding the bearish mood, market intelligence firm Genscape reported on Thursday a 2.2-million-barrel weekly build at the Cushing, Okla. delivery base for , traders who saw the data said. Any weekly Cushing build above 1 million barrels is typically bearish for oil prices.

“The market is almost daring OPEC to do something now,” said John Kilduff, oil trader and partner at New York energy hedge fund Again Capital. “We have an OPEC meeting this weekend and I find it hard to believe they are not going to get together and try and talk this market back up.”

The Joint OPEC-Non-OPEC Ministerial Monitoring Committee, which includes and other major Middle Eastern oil producers along with Russia, will be meeting this weekend in Abu Dhabi.

That will be followed by OPEC’s monthly meeting in Vienna on Dec. 6, where production quotas are usually finalized. Russia will be meeting with OPEC a day after that, in line with the cooperation that has existed since 2015 between the cartel and to intervene in any collapse in global oil prices.

U.S. was 47 cents, or 0.8%, at $61.20 per barrel by 1:00 ET (18:00 GMT), after hitting an 8-month low at $60.56. In early October, WTI hit four-year highs of nearly $77.

U.K. crude, the international benchmark for oil, was off 2 cents, or 0.03%, to $72.11 per barrel. That was about 17% off Brent’s four-year highs above $86 hit last month. Earlier on Wednesday, Brent was down as much as 76 cents.

If WTI stays in negative territory until Thursday’s settlement, it will be the market’s ninth-straight day of losses. The last time WTI experienced such a losing streak was between June 26 and July 9 2014, when it fell 10 sessions in a row.

Tariq Zahir, who trades long-dated spreads in WTI at Tyche Capital Advisors in New York, also believes OPEC will intervene by this weekend to try and pull the market higher.

“But the market’s most likely going to break $60 first as the record highs in U.S. production is a bigger worry for now,” said Zahir.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source: Investing.com