“Oil prices are trading largely unchanged at just shy of $46 per barrel (Brent) and just under $43 per barrel (WTI)”, said Commerzbank analyst Carsten Fritsch.
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Speculative funds are now holding short positions equal to more than three and a half days’ worth of global oil demand in NY and London, the paper reports. While the US has kept production levels high, Saudi Arabia, the largest producer in OPEC, has refused to cut its production levels despite concerns about oversupply in the global markets.
US retail regular-grade gasoline prices continue to decline, averaging $2.09 per gallon (g) as of November 23, 73 cents lower than this time previous year and the lowest heading into a Thanksgiving holiday weekend since 2008.
On Tuesday, crude futures hit two-week highs after Turkey shot down a Russian warplane for alleged intrusion of its airspace, heightening political tensions in the Middle East.
“From a fundamental point of view, an increase in OPEC’s production quota is much required; Indonesia’s inclusion into the cartel will add roughly 800,000 barrels a day into the overall production pipeline will give OPEC the ideal excuse to propose a higher quota”, said Gan.
Despite a supply glut that has caused crude prices to more than halve over the past 18 months – due primarily to high output from United States shale rock but also owing to weaker Chinese demand – Iran has consistently said it plans to up its output when nuclear-related sanctions are lifted under a deal agreed in July with world powers.
Elsewhere, crude oil for delivery in January on the New York Mercantile Exchange rose 58 cents, or 1.38%, to trade at $42.33 a barrel. Diesel futures fell 3% to $1.3597 a gallon.
US stock futures pointed to a rise of around 0.2 percent at the open on Wall Street.
A firmer U.S. dollar also weighed on oil, making greenback-denominated contracts more expensive for holders of other currencies. They are up 4.8 per cent so far this week, but have plunged 9.1 per cent since the beginning of the month.
Diesel futures lost 5.03 cents, or 3.6%, to $1.3524 a gallon, the lowest price since April 30, 2009. The euro rose to $1.0673 from $1.0654.
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Jenny W. Hsu contributed to this article.
