Oil Stems Bear Market Collapse as OPEC+ Move Closer to Cuts
(Bloomberg) -- Oil stemmed its slump into a bear market after OPEC and its allies started laying the groundwork to cut supply in 2019, reversing an almost year-long expansion.
West Texas Intermediate crude futures jump as much as 1.3 percent in New York to $60.97 a barrel after sliding 4.7 percent last week for a fifth weekly decline; Brent added 1 percent to $70.88.
- Oil has collapsed into a bear market in little more than a month, and pressure is mounting on the OPEC+ group to act sooner than their policy meeting in December.
- Saudi Arabia will export 500,000 fewer barrels a day in December than this month, taking the lead in OPEC to counter the price rout
- “We as responsible producers are going to work, and work hard, to balance the market within a reasonable corridor,” Saudi Energy Minister Khalid Al-Falih told reporters on Sunday in Abu Dhabi. Demand for Saudi oil is “tapering off” in part because of seasonal factors, so the kingdom will ship less, he said.
- While its meeting with other producers on Sunday yielded no change in supply policy, OPEC+ warned in a statement that it might need “new strategies,” raising the prospect of a wider and coordinated cut in 2019.
- Although there are signs of a glut emerging in the U.S., the Saudi minister said it was too early to talk about coordinated production cuts within OPEC+. Counterparts from Russia and the United Arab Emirates echoed that sentiment.
- Total WTI volume traded was about 114 percent above the 100-day average on Monday
- WTI fell for 10 consecutive days through Friday, wiping out any gains for the year
- WTI has fallen more than 20 percent from its recent peak of $76.41 in October, a definition of a bear market
©2018 Bloomberg L.P.