What will happen today?
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He added Saudi Arabia and Qatar are considering his country’s proposal for an equilibrium price of $88 a barrel, Kallanish Energy learns. That was near levels seen on Friday before the USA crude December contract expired.
Oil is sliding again following some fleeting gains, while Venezuela is predicting that crude prices may fall to the mid-$20s next year if OPEC fails to stem supply.
“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.
Not wanting to let go of the reigns of the global crude market, OPEC has warned of a complete flip of the current situation from oversupply to a shortfall due to a significant decrease in the production capacity of producing wells, and slower catch-up by new additions as weaker oil prices have kept investment at bay.
One oil strategist on Wall Street said that no one really believes that Saudi Arabia will bow to the ongoing pressure of cutting output.
Investors continue to be pessimistic following the release of data about commercial stockpiles of USA crude oil that rose by 0.3 million barrels, or 0.1%, to 487.3 million barrels in the week ended on November 13.
The break in USA crude futures below US$40 a barrel exacerbated the pace of the selling, CMC’s Lawler said. The price of oil has tanked more than 60 percent in the previous year, costing oil companies more than $100 billion in planned investments, reports Business Insider.
January contract had fallen $1.16, or 2.77 per cent, to $40.74 a barrel by 0740 GMT.
Saudi’s cabinet said yesterday it was ready to cooperate with OPEC and non-OPEC countries to achieve market stability, days before OPEC meets to review its year-long policy of not supporting prices.
“Irrespective of [Saudi Arabia’s] statements we still think that the oil price has a challenging time ahead as we move into the first half of 2016 with rising stocks…and a likely stronger [U.S. dollar]”, Bjarne Schieldrop, commodities analyst at SEB Markets said.
Light, sweet crude for January delivery rose $1.27, or 3%, to $43.02 a barrel on the NY Mercantile Exchange. The euro fetched $1.06365, having fallen to a seven-month low of $1.0592 in US trade on Monday.
Saudi Arabia said it is prepared to use all measures necessary to ensure a stable oil market.
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The Saudi remarks came as oil prices barely held above 2-1/2-month lows, and were greeted with a mix of enthusiasm and skepticism.
