Oil prices climbed in Asia Tuesday before a meeting of the OPEC oil cartel and a report on United States commercial crude inventories which will let traders gauge demand in the world’s biggest oil consumer.
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The Saudi Press Agency released a statement from the Minster for Petroleum and Mineral Resources, Ali bin Ibrahim Al-Naimi, mentioning Saudi Arabia’s “continued willingness and prompt, assiduous efforts to cooperate with all oil-producing and -exporting countries, both from within and outside OPEC, in order to maintain market and price stability”. That said, in 2016 Mexico will consciously increase oil extraction to depress the market price as deep as possible so that the hedge payoff would be greater.
On Monday, November 23, crude oil prices dropped by as much as 3% on expectations that the global glut in crude oil supply will continue and OPEC will not change its output policy.
Furthermore, the Saudi finance minister has recently assured that the government’s hefty spending on major public projects and social welfare will continue unabated. “We don’t agree with that position of Saudi Arabia”, del Pino said on the sidelines of the Gas Exporting Countries Forum (GECF) Summit in Tehran.
Oil futures were hovering at a 2 1/2-month low Monday morning in NY after a brief uptick following the Saudi remarks.
U.S. West Texas Intermediate (WTI) crude futures were down 68 cents a barrel at $41.22 a barrel by 1413 GMT, having touched a session high of $42.75 following the Saudi statement. He said that the group should adopt a price ceiling of $88 per barrel to ensure that the profitability of the group is not compromised in the future. “While an increase in Iranian production is not a surprise, it will be a negative when it hits the market”.
“News of a military jet crashing in Syria is a reminder that there is still substantial risk in the Middle East”, said Bjarne Schieldrop, commodities analyst at SEB Markets. The December contract expired on Friday after declining 0.4 per cent to close at US$40.39, the lowest settlement since Aug 26. The long-term oversupply concerns and record global inventory will push crude oil prices lower.
Brent futures ended at $44.66 a barrel on Friday. Any discounts on Russian crude are a matter for the oil companies and not the Energy Ministry, Novak said.
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Flynn said much of the market action appeared technical in nature, with the January Nymex WTI contract moving lower to largely fill the gap left on the continuous futures chart after the expiration of the December contract at $40.35 a barrel last week.
