Investing.com – The Russians are stalling again and the oil market is showing its displeasure, hurtling toward its worst monthly loss in a decade.
U.S. West Texas Intermediate crude teetered above and below $50 per barrel on Friday after Russian Energy Minister Alexander Novak told domestic news service TASS that producers and consumers were comfortable with current oil prices. It was the clearest sign that Moscow saw little or no need to contribute to production cuts when it joins Saudi Arabia and other major oil producers at the OPEC+ meeting in Vienna on Dec. 6.
was down 29 cents, or 0.6 %, at $51.79 per barrel by 12:47 PM ET (17:47 GMT). It sunk earlier to $49.66, the lowest level since Oct 2017. For November, WTI was headed for a 21% loss, its largest for a month since 2008. It was also the second-straight double-digit monthly loss after October’s 11% drop that left U.S. crude down 16% year to date.
U.K. , the global benchmark for oil, was down 39 cents, or 0.7%, at $59.92 . Earlier in the session, it fell to $58.05. Last week, Brent broke below the $60 perch it had held since July 2017. For November, it was down 21% and for the year it showed an 11% loss.
Just a day ago, the Russians were singing a different tune, at least based on a Reuters report. Citing sources, the news service said the Novak had met with domestic crude producers and reached a consensus that an output reduction was necessary. WTI and U.K. Brent, the global benchmark for oil, settled up more than 2% on that speculation, one of the few decent rebounds for this month.
Traders will be on the lookout for U.S. oil rig drilling data due later on Friday for affirmation that production in U.S. crude was rising relentlessly. Although the U.S. rig count dropped by 3 to 885 last week, it remains close to its highest level since March 2015.
Oil was rising earlier in the year, hitting four-year highs between May and October after President Donald Trump vowed to bring Iranian crude exports to zero under new sanctions.
But in the past two months crude prices have lost more than a third of their value after Trump’s sanctions proved tamer than thought and record U.S., Saudi and Russian output flooded the market with supply.
Equally damaging to the psyche of the market have been tweets from the president that the Saudis should not cut output, a directive traders had expected Riyadh to comply with, given its potential exposure to U.S. sanctions after the murder of journalist Jamal Khashoggi.
Aside from the Russian-Saudi OPEC theater on Friday, traders were also getting restless that the G20 meeting in Buenos Aires had not yielded any breakthrough yet on a potential U.S.-China trade deal, one of the few things that could boost global optimism and energy demand in the world’s second-largest economy.
“Oil Is asking ‘What’s new Buenos Aires?'” Phil Flynn, energy analyst at Chicago’s Price Futures Group wrote in his daily note. “The big G20 meeting will basically tell the tale of oil going forward.”
“Bottom line, OPEC needs to announce a big cut or it will be up to President Trump to cut a deal with China to save the price of oil.”
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Source: Investing.com
