Oil slipped again on persistent fears that a surplus will re-emerge next year despite OPEC’s plans to cut production.
Futures for January delivery declined 0.8 percent in New York. The Organisation of Petroluem Exporting Countries and its partners need to watch the market in the coming weeks before making any decisions to trim output, Russian Energy Minister Alexander Novak said on Monday. The producer group will meet in Vienna in early December to discuss supply curbs and International Energy Agency Executive Director Fatih Birol warned that any reduction could have negative implications.
“The name of the game in the oil market is volatility,” Birol said at a conference in Oslo. “And with the increasing pressure of geopolitics on oil markets that we are seeing, we believe that we are entering an unprecedented period of uncertainty.”
Crude markers in New York and London have both fallen more than 20 percent from their October highs on concerns over a supply glut after the U.S. granted waivers to some countries to buy Iranian oil despite sanctions. While trade tensions between China and America weaken the outlook for oil demand, Saudi Arabia’s oil policies aim to preserve market stability, the nation’s king said during his first major public address since the murder of prominent journalist Jamal Khashoggi.
West Texas Intermediate for January delivery traded at $56.72 a barrel on the New York Mercantile Exchange, down 48 cents, at 9:50 a.m. in London. The December contract settled 0.5 percent higher on Monday and has expired. Total volume traded was 12 percent above the 100-day average.
Brent for January settlement dropped 63 cents to $66.16 a barrel on the London-based ICE Futures Europe exchange. The contract closed 3 cents higher at $66.79 on Monday. The global benchmark crude traded at a $9.38 premium to WTI for the same month.
Novak’s wait-and-see stance to not immediately join Saudi counterpart Khalid Al-Falih in calling for a broad production cut shows the nations’ different positions persist just weeks before the key OPEC+ summit in the Austrian capital. While Russia pointed out the need for a “balanced decision,” the kingdom has sought curbs of about 1 million barrels a day.
Other oil-market news: U.S. crude inventories probably rose 3.5 million barrels last week, according to a median forecast in a Bloomberg survey of analysts. If confirmed by government data later this week, that would be the ninth consecutive weekly increase, the longest stretch of gains since March 2017. British chemicals giant Ineos AG has dipped its toes in fashion, football clubs and car making over the years. But its latest plan shows its heart is in the oil and gas that feed its plants. Noble Group Ltd. is being investigated by three Singaporean agencies for “suspected false and misleading statements” and breaches of disclosure requirements, more than three years after a whistle-blower questioned the company’s accounting.