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Oil prices climb in line with the expected OPEC cut, but markets are still cautious

SINGAPORE (Reuters) – Oil prices increased by about 1 percent on Monday when traders expected top exporter Saudi Arabia to…

SINGAPORE (Reuters) – Oil prices increased by about 1 percent on Monday when traders expected top exporter Saudi Arabia to run OPEC producer club to reduce supply by the end of the year.

A rainbow is being watched over a pump jacket during the sunset outside Scheibenhard near Strasbourg, France October 6, 201

7. REUTERS / Christian Hartmann

Despite this, the market perspective is still weak on signs of a decline in demand among deep trade disputes between the world’s two largest economies, USA and China.

Brent crude futures last month was $ 67.29 per barrel of 0259 GMT, up 53 cents or 0.8 percent from their last closing.

US. West Texas Intermediate (WTI) Crude Futures CLc1, up 71 cents, or 1.3 percent, to $ 57.17 per barrel.

“The bullish hackers of the market are still waiting for OPEC + to deliver a large number,” said Stephen Innes, Asia-Pacific Trade Manager at Oanda Singapore’s futures broker.

The organization of the petroleum exporting countries (OPEC), which was actually led by Saudi Arabia, drives the production cartel and its allies to cut 1 million to 1.4 million barrels per day (bpd) for delivery to adapt to a decline in demand and prevent overcrowding.

In spite of Monday’s profits, the price of commodity remains almost a quarter past its last peaks in early October, offset by strong supply and sluggish demand.

This is due in part to Washington’s grant to Iran’s largest oil customers, mostly in Asia, unexpectedly extensive exceptions to sanctions resumed in Tehran in November.

Japanese refiner Fuji Oil is set to resume Iranian raw purchases after Japan has received one of these exceptions, explains industry sources familiar with the issue.

Japan had discontinued all purchases of Iranian oil before it was received in early November.

At the same time, oil production is increasing in the United States.

US. energy companies have added two oil platforms this week to November 16, giving the total bill to 888, the highest level since March 2015, said a weekly report from the energy service Baker Hughes on Friday.

The rising drilling activity points to a further increase in US crude oil production C-OUT-T-EIA, which has already jumped by almost a quarter of this year, to a record of 11.7 million bpd.

Weakened supply and demand slowdown, financial markets have become increasingly cautious against the oil sector, where money managers cut their bullish bets on raw futures and alternatives to the lowest level since June 2017, the US Commodity Futures Trading Commission (CFTC) said on Friday.

The speculation group reduces its combined futures and options positions on the United States and the Brent raw material during the week ended November 13 to the lowest since June 27, 2017.

Reporting by Henning Gloystein; Editing Joseph Radford

Our Standards: Thomson Reuters Trust Principles.

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