Light, sweet crude for January delivery fell 0.5% to $41.53 a barrel on the NY Mercantile Exchange.
Advertisement
A continued rise in US commercial crude inventories further confirmed predictions the glut will last well into next year, with Iran also expected ramp up production when Western sanctions are lifted under a deal with major powers to curb its nuclear program.
Saudi Arabia and Iraq, the two biggest oil producers of OPEC, increased their output significantly from a year ago with production last month at 10.2 million and 4 million bpd, respectively.
Oil prices dipped Friday in a market burdened by a persistent oversupply of crude.
Speculators now hold more positions that are betting on a drop in the oil price than at any time since at least 2009, according to Reuters data.
“It’s hard to see what else moved the price besides the Saudi statement, even though it’s exactly what Oil Minister al-Naimi said last week”, said Giovanni Staunovo, an analyst at UBS Group AG in Zurich.
Bijan Zanganeh, said on November 21, that he doesn’t expect any change in Organization of Petroleum Exporting Countries’ (OPEC) output policy.
Front-month Brent futures for January lost 6 cents to $44.12 a barrel, after finishing up just 4 cents on Thursday at $44.18.
West Texas Intermediate crude, the USA benchmark, headed for a third weekly loss after falling below $40 this week for the first time since August on concern a global supply glut will deepen.
Gasoline futures recently rose 2.8% to $1.327 a gallon.
Another factor weighing on oil prices is the rising dollar on anticipation that the U.S. Federal Reserve might tighten monetary policy in the next month policy meeting.
“The Saudis’ past promises on working for price stability has led to nothing, so it wasn’t surprising there was as much disbelief as initial excitement over today’s announcement”, said John Kilduff, partner at NY energy hedge fund Again Capital.
Oil extended its decline amid a broader commodity rout while Venezuela predicted crude prices may drop as low as the mid-$20s a barrel unless Opec takes action to stabilise the market.
With the future direction of oil prices notoriously hard to predict, how does del Pino’s forecast fit in with those of other industry insiders?
Advertisement
Oil prices have tumbled roughly 45% in the past year as OPEC members and oil producers outside the group have failed to agree on supply cuts.
