Saudi Energy Minister Goes to OPEC with a Weak Hand: Kemp

Crude Oil

Crude Oil

There are several factors that have an impact on oil prices: supply, market anxieties, political impact on trade, the use of technology in production and natural disasters.

Both worldwide oil benchmarks, North Sea Brent LCOc1 and USA light crude CLc1, have had their weakest month for more than 10 years in November, losing 28 percent and 30 percent respectively as global supply has outstripped demand.

Brent crude futures were last up 51 cents on the day at $59.27 a barrel, off an earlier session low of $57.50, while USA crude futures rose 68 cents to $50.97.

A director with Tortoise, Nick Holmes, who manages a portfolio in energy that is over $16 billion, this report shows an increased build in relation to the market consensus on crude stockpiles in the US.

"We are in contact with OPEC and we are ready to continue our joint efforts if needed", Putin said.

If Russia bore the same proportion of such cuts as it did under the existing agreement, its share of the reduction would amount to 166,000 bpd.

The news agency says that Moscow could be represented at the cartel meeting on December 6-7, but negotiation cartel leader Saudi Arabia is still on-going.

While Saudi Arabia and its Energy Minister Khalid al-Falih have been airing the idea of a new production cut, Russian Federation has been less convinced that it could take part in another reduction, or at least so it lets the market to believe.

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In a video posted by the Saudi Gazette newspaper the two leaders can be seen speaking in hushed tones with their heads close together.

The other meeting that is key to the oil markets will be the meeting between OPEC members and their allies which is scheduled to take place in Vienna, Austria next week. Brent crude slid early to another 2018 low below $58 a barrel.

Oil's on track for its worst month in a decade on growing fears over a global supply glut that's been exacerbated by American waivers to Iranian crude buyers.

The outcome of next week's OPEC meeting "remains clouded by uncertainty", Stephen Brennock of oil broker PVM told Bloomberg.

The weakness in sentiment is visible in the Brent forward price curve, which now has prices for future delivery above those for immediate dispatch, a structure known as "contango", which can make it attractive to put oil into storage.

Saudi Arabia faces a familiar but uncomfortable choice: cut production to defend prices or allow prices to fall to protect market share.

Oil traded down to below $60 a barrel on Wednesday, pressured by rising USA stocks and questions over whether OPEC will agree on out put cuts.

Oil prices dipped on Wednesday, as the U.S. Energy Information Administration (EIA) recorded a continuous rise in U.S. crude inventories, exceeding market expectations.

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