“Oil markets are really moving range bound…mainly because fundamentals have yet to change”, said Daniel Ang, an investment analyst at Phillip Futures Pte Ltd. “Markets are a bit fearful that Iranian oil could come in”.
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“But on the other hand, they know that OPEC producers are under financial stress given these low oil prices and they’re spending their cash at very rapid rates, including the Saudis”.
A few investors interpreted this as a sign that Saudi Arabia, the most influential member of OPEC, could push the oil cartel to curb its output and increase prices at its coming meeting December 4.
The strength of the us dollar, which was trading near seven-month highs, has a negative impact on crude prices, as it makes oil and other commodities more expensive for holders of other currencies.
As Doug Terreson, an oil analyst with Evercorer ISI, explained during a November 13 webinar, OPEC sought two things: an increase in demand and less production in the West. The $70 per barrel price didn’t achieve either objective; nor did $60 oil.
Robust output in the US, Saudi Arabia and elsewhere pushed the oil market into oversupply in mid-2014 and has kept prices near multiyear lows all year. The volume of all futures traded was about 93 per cent above the 100-day average.
The West Texas Intermediate contract for the same month, the US marker grade, lost as much as 2.2 percent to $40.96 a barrel. Analysts said that while the supply demand balance remained shaky, traders were taking a step back from bearish indications.
Brent for January settlement was 22 cents lower at $44.44 a barrel on the London-based ICE Futures Europe exchange.
Benchmark Brent futures were up 45 cents, or 1 percent, at $45.11 a barrel by 1:35 p.m. EST (1835 GMT).
USA crude production added 3,000 to 9.182 million barrels a day last week, according to EIA’s report.
Underscoring the volatility in the oil market, both benchmarks are up for the week, by about 1.5%, after dipping to multi-month lows below $40 a barrel earlier in the week.
Situations are not becoming better even though there has been reduction in the number of U.
LME nickel slid more than 6 percent to a 2003 low, hitting $8,175 a tonne, and trading last at $8,335.
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Meanwhile, crude oil inventories in the USA increased for an eighth straight week, the U.S.’ Energy Information Administration said last Wednesday.
