What will happen today? The level was seen on Friday prior to the expiry of the U.
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Crude oil futures lost ground in early Asian trading on Monday, pressured by a global supply surplus despite a cut in the number of United States oil rigs for an eleventh week out of 12.
On the NY Mercantile Exchange, West Texas Intermediate futures was off 27 cents, or 0.6%, at $41.69 a barrel. He said markets were waiting for the OPEC meeting to see if the cartel “really means business” to trim production.
“The market is quite skeptical that any resolve will occur between OPEC and non-OPEC producers”, said Andy Lipow of Lipow Oil Associates. The price of oil has tanked more than 60 percent in the past year, costing oil companies more than $100 billion in planned investments, reports Business Insider.
Brent for January settlement was 22 cents lower at $44.44 a barrel on the London-based ICE Futures Europe exchange. Oil traders closely watch any comment from Saudi Arabia’s political leadership for signs it might revert from its policy of recovering market share to its old policy, dropped in November 2014, of defending oil prices by cutting output. However, he added that there is only about a “15% probability that this might happen” and if oil was to fall to this level, it would only be temporary “shock to the system” before the market stabilised again.
The Saudi cabinet said on Monday it was ready to cooperate with OPEC and non-OPEC countries to achieve market stability, days before OPEC meets to review its policy. “S. crude output and seasonal demand provide some support to oil at low prices”.
The US dollar hovered near an eight-month high against a basket of currencies on Tuesday, keeping a lid on oil prices as a strong greenback make dollar-denominated contracts more costly for holders of other currencies. USA crude futures have been particularly battered as data from the Energy Information Administration showed an eighth straight week of stock builds. “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”.
Oil prices have tumbled roughly 45% in the previous year as OPEC members and oil producers outside the group have failed to agree on supply cuts.
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Brent crude, the benchmark for about half the world’s crude, closed as low as US$42.69 a barrel in August, the weakest in more than six years.
