Oil Steadies as Traders Await Signals From OPEC on Output Curbs
(Bloomberg) -- Oil steadied in subdued holiday trading as traders awaited further signals from OPEC on whether the group will cut production next month.
Futures were little changed in New York after Wednesday’s 2.3 percent jump pared some of the losses from a rout earlier this week. Expectations are growing that OPEC will address a looming oversupply, which only seemed to worsen as U.S. crude inventories rose for a ninth week, the longest run of gains since March 2017, according to government data Wednesday.
Crude entered a bear market this month on concern a supply glut was emerging. While traders expect Iranian oil to flow back into the market under America’s waivers to some nations, the Organization of Petroleum Exporting Countries and its allies will seek ways to reach a balance when they meet next month. All options are on the table for the group’s talks, ranging from no cuts to a joint reduction of 1.4 million barrels a day, according to Citigroup Inc.
“Our base case is for OPEC+ members to see through the pressure from President Trump and concentrate efforts on curbing the current oversupply in the market by conforming to a new production cut,” said Ehsan Khoman, head of Middle East and North Africa research and strategy at MUFG Bank Ltd. in Dubai.
West Texas Intermediate for January delivery dropped 6 cents to $54.57 a barrel as of 9:05 a.m. local time. Total volume traded was 16 percent below the 100-day average. There’ll be no settlement on Thursday due to the U.S. Thanksgiving holiday.
WTI rose $1.20 on Wednesday, after plunging 6.6 percent in the previous session.
Brent for January settlement was little changed at $63.47 a barrel on the London-based ICE Futures Europe exchange, after settling up 1.5 percent on Wednesday. The global benchmark crude traded at an $8.96 premium to WTI.
In the U.S., nationwide inventories rose by 4.85 million barrels last week to about 447 million barrels, according to Energy Information Administration data. That’s more than the 3.45 million-barrel gain expected in a Bloomberg survey. Still, it’s about half the increase of the prior week, and gasoline and distillate stockpiles declined, suggesting demand for petroleum remains resilient.
Meanwhile, President Donald Trump thanked Saudi Arabia for lower oil prices in a tweet, adding “let’s go lower!” Trump said earlier he won’t let the killing of U.S.-based journalist Jamal Khashoggi jeopardize America’s relations with Saudi Arabia as oil prices could “go through the roof.”
His tweet came after the kingdom’s crude output was said to surge to a record near 11 million barrels a day this month, following stronger-than-usual demand from customers preparing for a disruption in Iranian supplies.
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