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Oil dropped again on persistent fears that a surplus will re-emerge next year despite OPEC’s plans to cut production.
Futures for January delivery fell 1.5% in New York. US inventories are on track for a ninth weekly increase, the longest run in more than a year, according to a Bloomberg survey before government data due on Wednesday. While the Organization of Petroleum Exporting Countries has signaled it plans to curb output when it meets next month, it’s unclear whether ally Russia will assist.
“The name of the game in the oil market is volatility,” International Energy Agency Executive Director Fatih Birol said at a conference in Oslo. “And with the increasing pressure of geopolitics on oil markets that we are seeing, we believe that we are entering an unprecedented period of uncertainty.”
Crude markers in New York and London have both fallen more than 20% from their October highs on concerns over a supply glut after the US granted waivers to some buyers of Iranian oil despite sanctions. While trade tensions between China and America weaken the outlook for demand, Saudi Arabia’s oil policies aim to preserve market stability, the nation’s king said during his first major public speech since the murder of prominent journalist Jamal Khashoggi.
West Texas Intermediate for January delivery traded at $56.37 a barrel on the New York Mercantile Exchange, down 83 cents, at 08:18 local time. The December contract settled up 0.5% on Monday and has expired. Total volume traded Tuesday was 40% above the 100-day average.
Brent for January settlement dropped $1.12 to $65.67 a barrel on the London-based ICE Futures Europe exchange, after closing little changed on Monday. The global benchmark crude traded at a $9.27 premium to WTI.
Russian Energy Minister Alexander Novak said Monday that the country and its allies in OPEC need to watch the oil market in the coming weeks before making any decisions to reduce output. The wait-and-see approach contrasts with Saudi Arabia’s call for cuts, just weeks before they meet at a key OPEC+ summit in Vienna. While Russia pointed out the need for a “balanced decision,” the kingdom has sought curbs of about 1 million barrels a day.
Other oil-market news: US crude inventories probably rose by 3.5 million barrels last week, according to the median forecast in a Bloomberg survey of analysts. If confirmed by government data, that would be the ninth consecutive weekly increase, the longest stretch of gains since March 2017.
British chemicals giant Ineos AG has dipped its toes in fashion, soccer clubs and car making over the years. But its latest plan shows its heart is in the oil and gas that feed its plants. Noble Group Ltd is being investigated by three Singaporean agencies for “suspected false and misleading statements” and breaches of disclosure requirements, more than three years after a whistle-blower questioned the company’s accounting.
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