Published: Fri, November 30, 2018
Business | By Eloise Houston

Oil Slides Toward Worst Loss in a Decade as Russia Mixes Signals

Oil Slides Toward Worst Loss in a Decade as Russia Mixes Signals

Oil toiled at a more than one-year low at the end of November, its worst month in a decade. The comments by Putin about $60 oil added to doubts about the ability of the OPEC-plus meeting to produce an agreement on a cut, while the Saudis have insisted they won't bear the cuts alone, Weinberg noted. While oversupply concerns were fueled by American exemptions on sanctioned Iranian oil, a trade dispute between the US and China has threatened to hurt demand.

At 1300 GMT, January WTI crude oil is trading $50.97, up $0.68 or +1.35% and January Brent crude oil is at $59.42, up $0.66 or +1.12%.

These events have led to a drastic decline in crude prices, with Brent Crude now hovering between $59 and $60 per barrel. As Delia Morris, Houston-based commodity pricing analyst, told Rigzone earlier this week, global oil markets are anxiously awaiting the outcome of the December 6 Organization of the Petroleum Exporting Countries (OPEC) meeting and whether the cartel will agree to curb output.

There are several factors that have an impact on oil prices: supply, market anxieties, political impact on trade, the use of technology in production and natural disasters.

Natural-gas futures, meanwhile, settled lower after the Energy Information Administration reported Thursday that domestic supplies of natural gas fell by 59 billion cubic feet for the week ended November 23. However, the Saudi Arabian minister was less confident than previously, and he did not specify an actual cut in oil production.

Surging oil production in the United States, Russia and by members of the Middle East-dominated OPEC has helped fill global inventories and create a glut in some markets. "There is optimism over OPEC's supply cuts as well as slowing USA output as current prices could idle shale production". Now the market is being flooded with oil supply. The nations are in talks over the timing of any reduction in supply, Reuters reported Thursday.

John Hancock Financial Services' Adam Wise, a strategist who takes care of a $9 billion oil and gas portfolio, stated that everyone was now looking towards the OPEC meeting next week to get a sense of which direction oil prices were going to take.

In other words, US crude inventories hit their highest level in a year after a tenth consecutive weekly increase, and are now only 80 million barrels below March 2017's record 535 million barrels, according to the Energy Information Administration.

US energy firms this week added oil rigs for a third week in four and increased the rig count for the fifth month in a row, General Electric Co's Baker Hughes energy services firm said in its closely followed report on Friday.

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