Oil prices drop amid rising US stocks, OPEC uncertainty

Roman Schwartz
November 30, 2018

A seemingly relentless rise in USA crude supply, together with Saudi Arabia's insistence that it will not cut output on its own to stabilise the market, earlier sent Brent crude to another 2018 low below $58 a barrel. These are the data of trading of the NY stock exchange on Thursday, November 29.

There is need of a cut, but Russian Federation doesn't want to chip in with a large cut, a second source told Reuters.

Russian President Vladimir Putin will meet Prince Mohammed in Argentina at this weekend's G20 summit, which Trump is also to attend.

The Russian Energy Ministry held a meeting with the heads of domestic oil producers on Tuesday, before a gathering in Vienna of the Organization of the Petroleum Exporting Countries and its allies on December 6-7.

Oil traded down to below $60 a barrel on Wednesday, pressured by rising United States stocks and questions over whether OPEC will agree on out put cuts. Wise stated that that would depend on the severity of cuts adopted by OPEC and its allies.

US West Texas Intermediate (WTI) crude futures were at $51.30 per barrel at 0023 GMT, down 15 cents, or 0.3 percent from their last settlement. The WTI's 14-day Relative Strength Index is still in oversold territory.

Brent crude futures (LCOc1) rose 75 cents, or 1.3 percent, to settle at $59.51 a barrel, after touching an intraday high of $60.37 a barrel.

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Saudi Arabian Energy Minister Khalid Al-Falih and Nigerian Energy Minister Emmanuel Ibe Kachikwu told the press in Abuja that there were confident that OPEC and its allies would succeed in stabilizing crude oil prices. "If no action is taken, oil prices could certainly drop further, while a production cut should lead to a sizable rebound for these severely oversold levels".

Since the beginning of November of oil has already fallen in price on 23%. Russian Federation wants more predictability and "smooth price dynamics" in world crude markets, Deputy Foreign Minister Sergei Ryabkov said in Buenos Aires.

The biggest snag in OPEC's push for a consensus on cutting oil output could come from relentless growth in supply from its second-biggest producer, Iraq.

Futures tumbled as much as 1.8% in NY, after sliding 2.6% in the previous two sessions.

USA crude inventories zoomed to 450 million barrels as of the week to November 23, exceeding expectations, the Energy Information Administration data showed on Wednesday. That's more than the 1-million-barrel gain predicted in a Bloomberg survey, overshadowing a surprise draw in gasoline inventories.

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.

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