Pelosi, Mnuchin to discuss stimulus bill
OPEC+ JMMC to monitor demand outlook
Brent-WTI spread weakest since March
New York —
Oil futures settled lower Oct. 19 as overnight optimism that the White House and congressional Democrats could reach a deal on stimulus spending faded in afternoon trading.
NYMEX November WTI settled 5 cents lower at $40.83/b, and ICE December Brent was down 31 cents at $42.62/b.
Oil futures had been holding around even in early US trading but began moving steadily lower mid-day as stimulus hopes faded ahead of an Oct. 19 meeting between House Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin.
On Oct. 18, Pelosi issued a 48-hour deadline for the White House to reach a deal on spending in order to pass a bill ahead of the November elections.
NYMEX November RBOB settled 65 points lower at $1.1623/gal, and November ULSD was down 2.1 cents at $1.1581/gal.
Oil price declines extended in aftermarket trading, especially for RBOB, which at 1645 GMT was down 1.12 cents at $1.1576/gal.
Ministers on a key OPEC+ monitoring committee acknowledged a slowdown in the oil market’s recovery and vowed to be proactive in preventing a slide in prices, with the scheduled tapering of the coalition’s output cuts looming at year’s end.
“We will do what is necessary in the interest of all,” Saudi energy minister Prince Abdulaziz bin Salman said in his opening remarks to the OPEC+ Joint Ministerial Monitoring Committee meeting Oct. 19.
“Crude prices remained heavy after both the OPEC+ JMMC meeting did not discuss any changes to the tapering plan and as stimulus disagreements remain and the prospects of getting a deal done fade into next year,” OANDA senior market analyst Edward Moya said in a note. “The Saudis and Russians are getting along, but it will get ugly real fast if the fall surge/winter wave of the virus delivers a greater hit to the demand outlook.”
OPEC and 10 partners are set to ease their 7.7 million b/d collective production cuts by about a quarter to 5.8 million b/d at the start of 2021, but fading demand growth and the resurgence of Libyan supplies have muddled the path to more stable and higher oil prices.
Delegates have told S&P Global Platts the bloc may consider extending the cuts, but any new deal would require delicate political negotiations and potentially some concessions to countries weary of reining in production.
The ICE WTI-Brent spread narrowed to minus $1.59/b in afternoon trading, the tightest spread since mid-March as resurgent European oi demand outlooks dimmed amid a resurgence of COVID-19 coronavirus.
Chris van Moessner