Venezuela suggests that crude oil prices could fall to $25 per barrel unless OPEC (Organization of the Petroleum Exporting Countries) curbs the crude oil production.
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Brent crude oil futures gained some ground on Friday but remained near three-month lows as the pressure of a persistent supply glut limited optimism for a price recovery.
The loonie is likely to find resistance around 93.00 against the yen, 1.32 against the greenback, 1.40 against the euro and 0.95 against the aussie. The more-active January futures increased 85 cents to $42.57.
Markets were keeping an eye on developing geopolitical tensions in the oil-producing Middle East as Jordan’s King Abdullah, a USA ally, will hold talks in Moscow on Tuesday with Russian President Vladimir Putin on how to tackle “terror groups” led by Islamic State in Syria, an official source said.
“We can not allow that the market continue controlling the price”, he said.
Brent North Sea crude for January delivery, the global benchmark for oil, rose 17 cents to $44.83 a barrel in London. Oil prices jumped $1 a barrel after the comments, even though they repeated what Saudi Oil Minister Ali Naimi said in a speech last week.
When asked how low oil prices could go in 2016 if OPEC doesn’t change its policy, he said: “Mid-20s”.
The research team in commodities for a national bank said they were expecting to see an increase in the market towards the last few weeks of the year as refinery margins stay robust and that schedules for maintenance for December should be light. US crude inventories expanded for an eighth week, leaving supplies more than 100 MMbbl above the five-year average level for this time of year, government data showed Wednesday.
Secretary general of Opec Abdalla El-Badri has previously warned under-investment could one day push oil prices as high as $200 per barrel. Despite similar pledges in the past, the Saudis and other big OPEC producers have kept output high to maintain market share, and crude prices have dropped 50 per cent over the past year.
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WTI fell 8 percent in the report week on the NY Mercantile Exchange and settled at $40.39 a barrel on Friday, the lowest close since August 26. The strength of the USA dollar near seven-month highs has a negative impact on crude prices making oil and other commodities more expensive for holders of other currencies.
