“The principles of OPEC were to act on the price of the crude oil, and we need to go back to the principles of OPEC”.
Advertisement
Saudi Arabia said in a statement it was ready to work with other oil producing and exporting countries to stabilize prices. That was near levels seen on Friday before the US crude December contract expired.
The loonie is likely to find resistance around 93.00 against the yen, 1.32 against the greenback, 1.40 against the euro and 0.95 against the aussie.
“A fall below $40 per barrel[for West Texas Intermediate] is very possible and real”, said Barnabas Chen, an OCBC commodities analyst who said traders are mostly in a cautious mode as they expect the global supply glut to worsen next year due to expanding oil stockpiles.
Malaysia’s ringgit led an advance among emerging-market currencies as crude oil rose and the nation’s troubled state investment company moved closer to winding down operations.
Elsewhere, Venezuela’s oil minister said on Sunday that oil cartel Opec could not allow an oil price war and had to take action to stabilise the crude market soon.
“Ahead of the December 4th OPEC meeting, it’s a positive sign that the Saudis are talking this up right now”, said Carl Larry of Frost & Sullivan.
“There is a big drop in the production capacity of oil wells across the world, estimated around 4 million barrels a day, which means the petroleum industry needs new additional production capacity of around 5 million barrels a day every year…to meet the global demand”.
Market participants also anxious about the discount in nearby WTI versus farther-dated contracts, analysts said.
Brent crude, the global oil benchmark, fell 90 cents, or 2.1%, to $43.72 a barrel on London’s ICE Futures exchange. Russia, which isn’t a member of OPEC, is facing competition in Europe after Saudi Arabia reduced pricing for buyers in northwest Europe and started selling in established Russian markets such as Poland.
Despite the perpetual appeals to reduce output and support crude prices, OPEC has been refusing to do so as the organization is trying to maintain its market share.
The oil rig count in the USA has declined in 11 weeks of the past three months, while the total number of oil rigs in the US has fallen by 64 percent since October 2014 when the rig count was at its highest level with 1,609.
Advertisement
In the past one and a half years, OPEC members have exceeded their monthly production target of 30 million barrels per day.
