Opec+ will meet on November 26 as Saudi Arabia and Russia say they will continue with their additional voluntary oil output cuts until year-end
13 November 2023 - 12:19
by Paul Carsten, Yuka Obayashi and Colleen Howe
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Oil prices wavered on Monday, as renewed concerns over waning demand in the US and China, coupled with mixed signals from the Federal Reserve, kept markets uncertain. Picture: 123RF/Warawoot Nanta
London — Oil prices wavered on Monday, as renewed concerns over waning demand in the US and China, coupled with mixed signals from the US Federal Reserve, kept markets uncertain.
Brent crude futures for January were down 8c at $81.35 a barrel at 0916 GMT, after losing $1 in earlier trading, while the US West Texas Intermediate (WTI) crude futures for December were at $77.11, down 6c.
Prices gained nearly 2% on Friday as Iraq voiced support for oil cuts by Opec+, but lost about 4% for the week, recording a three-week losing streak for the first time since May.
“Investors are more focused on slow demand in the US and China while worries over the potential supply disruptions from the Israel-Hamas conflict have somewhat receded,” said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities.
The US Energy Information Administration (EIA) said last week crude oil production in the US this year will rise by slightly less than previously expected while demand will fall.
Next year, per capita US gasoline consumption could fall to the lowest level in two decades, it said.
Markets were wary of potential US policy tightening after Federal Reserve chair Jerome Powell said last week that it could raise interest rates again if progress on curbing inflation stalls.
More hawkish Fed speak is “not a prospect that crude oil will welcome given that recent data in China and the US has brought growth fears back to the surface,” said Tony Sycamore, a market analyst at IG.
Weak economic data last week from China, the world’s biggest crude oil importer, increased fears of faltering demand, with refiners asking for less supply from Saudi Arabia, the world’s largest exporter, for December.
In October, China’s consumer prices fell to pandemic-era lows, sparking concern about the country's economic recovery.
Still, if WTI approaches $75 a barrel, “we will likely see support buying on expectations that Saudi Arabia and Russia would decide to continue their voluntary supply cuts after December,” NS Trading’s Kikukawa said.
Top oil exporters Saudi Arabia and Russia confirmed last week they would continue with their additional voluntary oil output cuts until the end of the year as concerns over demand and economic growth continue to drag on crude markets.
Opec+, the Organization of the Petroleum Exporting Countries and allies including Russia, will meet on November 26.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Oil softer on fears of waning US and China demand
Opec+ will meet on November 26 as Saudi Arabia and Russia say they will continue with their additional voluntary oil output cuts until year-end
London — Oil prices wavered on Monday, as renewed concerns over waning demand in the US and China, coupled with mixed signals from the US Federal Reserve, kept markets uncertain.
Brent crude futures for January were down 8c at $81.35 a barrel at 0916 GMT, after losing $1 in earlier trading, while the US West Texas Intermediate (WTI) crude futures for December were at $77.11, down 6c.
Prices gained nearly 2% on Friday as Iraq voiced support for oil cuts by Opec+, but lost about 4% for the week, recording a three-week losing streak for the first time since May.
“Investors are more focused on slow demand in the US and China while worries over the potential supply disruptions from the Israel-Hamas conflict have somewhat receded,” said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities.
The US Energy Information Administration (EIA) said last week crude oil production in the US this year will rise by slightly less than previously expected while demand will fall.
Next year, per capita US gasoline consumption could fall to the lowest level in two decades, it said.
Markets were wary of potential US policy tightening after Federal Reserve chair Jerome Powell said last week that it could raise interest rates again if progress on curbing inflation stalls.
More hawkish Fed speak is “not a prospect that crude oil will welcome given that recent data in China and the US has brought growth fears back to the surface,” said Tony Sycamore, a market analyst at IG.
Weak economic data last week from China, the world’s biggest crude oil importer, increased fears of faltering demand, with refiners asking for less supply from Saudi Arabia, the world’s largest exporter, for December.
In October, China’s consumer prices fell to pandemic-era lows, sparking concern about the country's economic recovery.
Still, if WTI approaches $75 a barrel, “we will likely see support buying on expectations that Saudi Arabia and Russia would decide to continue their voluntary supply cuts after December,” NS Trading’s Kikukawa said.
Top oil exporters Saudi Arabia and Russia confirmed last week they would continue with their additional voluntary oil output cuts until the end of the year as concerns over demand and economic growth continue to drag on crude markets.
Opec+, the Organization of the Petroleum Exporting Countries and allies including Russia, will meet on November 26.
Reuters
Rally reversed as oil slips on jitters over waning demand in US and China
China’s oil imports from Iran hit record highs
ISAAH MHLANGA: Israel-Hamas war could escalate, leading to oil crisis
Oil improves on Friday but is set for a third weekly fall
Oil slips more due to falling demand by US and China
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.