Russian Federation plans to sign deal with OPEC

Russian Federation plans to sign deal with OPEC

The December contract settled up 0.5 percent on Monday and has expired.

Furthermore, the US government recently chose to soften its oil sanctions on Iran, which exacerbated the supply surplus concerns.

Traders said futures pared losses on bullish stockpile data Monday as they said that energy information provider Genscape reported that crude inventories fell in the week ended Friday. In 2019, world oil demand growth is forecast to grow by 1.29 mb/d year on year, about 70 tb/d lower than last month's projection, with total world consumption to reach 100.08 mb/d.

The drop came as U.S. stocks fell sharply too. The Dow Jones Industrial Average was down more than 500 points in midday trading amid weakness in Apple and other tech-related stocks, while the S&P 500 declined more than 40 points and the afternoon Nasdaq lost more than 120 points.

Crude futures and equities fell in tandem during a broad market sell-off last month that saw investors dump risk assets. Prices recovered somewhat in the latter half of last week, only to spiral downward again this week as concerns about oversupply persist.

The S&P energy sector (XLE -2.6%) supplants tech as the stock market's worst performer, as USA crude oil futures sink to fresh one-year lows, falling alongside stocks as investors dump risk assets; WTI -5% at $54.35/bbl, Brent -5.1% at $63.38/bbl.

The market is struggling to find firm footing after a rout that has seen prices fall more than $20 a barrel since early October on global oversupply fears. The number of short positions in WTI jumped by 12 percent. No manufacturing means less demand for crude oil.

Meanwhile, production is at or close to record highs in the US, Russia and Saudi Arabia.

More news: Do not eat romaine lettuce — CDC warns

Despite an expectation of OPEC-led cuts, Brent and WTI prices have slumped by 28 and 30 per cent respectively since early October, and the entire structure of the forward price curve has changed.

"The same old adage applies..."

"The list of reasons for the decline are pretty specific. too much supply and a risk of slowing demand growth", said James Mick, Energy Portfolio Manager with USA investment firm Tortoise.

But the White House is allowing some of the Islamic republic's biggest customers to carry on getting its oil, meaning the drop in supply will not be as big as was once expected. OPEC and other nations agreed to hike output in June based in part on Trump's vows to strictly enforce the sanctions.

The OPEC is expected to discuss production cuts when it meets on December 6.

Amid the uncertainty, financial traders have become wary of oil markets, seeing further price downside risks from the growth in US shale production as well as the deteriorating economic outlook.

Portfolio managers have sold the equivalent of 553-million barrels of crude and fuels in the past seven weeks, the largest reduction over a comparable period since at least 2013.

Wednesday's gains came after a report by the American Petroleum Institute on Tuesday that USA commercial crude oil inventories had fallen unexpectedly by 1.5 million barrels, to 439.2 million barrels, in the week to Nov 16.

Related Articles

  • Self-Proclaimed King of NY Tekashi69 Arrested On Racketeering Charges

    Self-Proclaimed King of NY Tekashi69 Arrested On Racketeering Charges

    He said: 'I don't got no manager, I got no booking agent, no PR, no publicist, I don't got nobody on my team - it's just me'. Last week the rapper revealed in an Instagram clip that he had dismissed his entire staff, including his manager and booker.
    Trump tells officials do 'more raking and cleaning' at wildfire site

    Trump tells officials do 'more raking and cleaning' at wildfire site

    Finns have been posting pictures of themselves online raking local forests, joking about "raking America great again". California has 33 million acres of forest, according to a University of California web page.
    Hamlin takes pole at final race of season

    Hamlin takes pole at final race of season

    And in the final 15-lap shootout to the finish, Logano used a power move on the outside line to shoot past Truex and drive away. Even Busch understood it was a big ask of Hamlin. "That's probably too far, but it would sure be nice", Busch said.
  • US envoy hopes for peace deal with Taliban in 2019

    US envoy hopes for peace deal with Taliban in 2019

    "We used the term stalemate a year ago and, relatively speaking, it has not changed much", CNN quoted General Dunford, as saying. The Associated Press reported on Sunday that Khalilzad held three days of talks with the Taliban in the Gulf state of Qatar.
    Israel avoids snap polls for now as key minister remains

    Israel avoids snap polls for now as key minister remains

    Bennett called for its demolition in his statement, despite an worldwide outcry against razing the strategically located village. It could also describe the latest chapter in a coalition crisis that threatens to bring down Benjamin Netanyahu's government.
    Jimmy Butler Once Again Takes Shot at Wolves After 76ers Debut

    Jimmy Butler Once Again Takes Shot at Wolves After 76ers Debut

    Simmons totalled five assists in the first quarter - the most a Sixers player has had in an opening quarter this season. Butler signed the game ball after the win on Friday and happily tossed it into the stands. "I'm just mad that we lost".
  • Trump Gives A Grade When Asked About Presidential Performance

    Trump Gives A Grade When Asked About Presidential Performance

    WALLACE: But, sir, leaders in authoritarian countries like Russia, China, Venezuela, now repress the media using your words. See, I know it because I'm a subject of it, a lot of people don't know but when I explain it to them, they understand it.
    Now Meghan Takes That royal role in her stride

    Now Meghan Takes That royal role in her stride

    She showed off a growing baby bump in the spectacular £1,095 gown, which was made in the same shade of blue as the Fijian flag. The Royal Variety Performance has been taking place since 1912 and raises money for its charity, according to its website .
    APEC summit ends without statement over US-China division

    APEC summit ends without statement over US-China division

    The stoush over trade came against the backdrop of deepening regional competition between China and the U.S. in the Asia-Pacific. But the USA and allies are countering with efforts to finance infrastructure in Papua New Guinea and other island states.
  • Trump says U.S.  to keep 'steadfast' partnership with Saudi Arabia

    Trump says U.S. to keep 'steadfast' partnership with Saudi Arabia

    Additionally, Germany has issued travel bans for 18 Saudi citizens, following a similar measure undertaken by France. The assessment is believed to have been revealed in a briefing to United States lawmakers.
    India licking their chops ahead of test series against struggling Australia

    India licking their chops ahead of test series against struggling Australia

    As far as Sharma and the India contingent is concerned, Australia cricket has never been more susceptible to losing at home. We feel like that when we play against someone like Virat Kohli , he wants to get into the fight.
    Lewis Hamilton responds after criticism over 'poor' India comment

    Lewis Hamilton responds after criticism over 'poor' India comment

    I have visited and always had an awesome time however whilst it is the fasted [sic] growing economy it also has a lot of poverty. Fans also pointed out that India's fast-growing economy is now the world's sixth largest.