Oil prices fall Monday, with U.S. benchmark below $60 and down a record 11 sessions in a row
By Mayra P. Saefong/MarketWatch
Petroleumworld 11 12 2018
Oil prices declined on Monday, giving up earlier gains to push the U.S. benchmark below $60 a barrel for the first time since February, down a record 11 sessions in a row, after President Donald Trump said he hopes OPEC doesn't cut crude production.
The move lower marks a reversal from earlier gains in prices, which had found support after the Organization of the Petroleum Exporting Countries and its allies signaled a tepid willingness to again cut production amid hefty global supply.
“The combination of the weak stock market and the Donald Trump tweet had oil give up its gains,” said Phil Flynn, senior market analyst at Price Futures Group. “Oil is in a weakened technical position and we had lighter than normal volume due to the Veterans Day holiday.”
And, “let's face it—OPEC and Trump are going at it,” he said.
Trump said in a tweet Monday that he hopes Saudi Arabia and OPEC won't cut oil production and said oil prices should be much lower based on supply .
West Texas Intermediate crude for December delivery CLZ8, -2.21% fell 26 cents, or 0.4%, to settle at $59.93 a barrel on the New York Mercantile Exchange, the lowest finish for a most-active contract since February.
That was also the 11th straight session decline—a record streak of session losses based on data going back to 1983 when WTI started trading, according to Dow Jones Market Data. Prices lost 4.7% for last week, tallying their fifth straight weekly drop.
See: Oil just did something never done before, as Trump calls for lower crude prices
On Thursday, the U.S. crude benchmark descended into a bear market , usually defined as a drop of at least 20% from a recent peak, ending its longest bull market since early 2015.
Saudi Arabian representatives said Sunday that the Kingdom would slash its exports unilaterally next month , as a broader OPEC alliance debated—but didn't agree to—a collective production cut.
“We need to do whatever it takes to balance the oil market,” Saudi Arabian Energy Minister Khalid al-Falih added on Monday at the start of an international gathering of petroleum ministers and industry leaders, according to the Wall Street Journal . Falih said if current supply and demand levels don't shift, OPEC, and its partner producers led by Russia, would need to cut production by around 1 million barrels a day at the group level.
Meanwhile, Russia, the world's largest producer, sent mixed signals on whether it would pull back on supply—after moving in lockstep on such matters with OPEC for more than two years, the Journal reported.
“The big 20% drop in oil prices in just over a month—triggered due to the sudden realisation by investors that the crude oil market had been excessively oversupplied—had clearly worried the OPEC+,” as they met in Abu Dhabi over the weekend, said Fawad Razaqzada, technical analyst at Forex.com.
On Monday, January Brent crude LCOF9, -1.67% edged down by 6 cents, or less than 0.1%, Monday to $70.12 a barrel on ICE Futures Europe.
Brent oil was down nearly 19% from its recent October peak and was also flirting with a bear market. A settlement of $69.032 would mark Brent's entry into a bear market.
Overall, crude output in Saudi Arabia, Russia and the U.S. had climbed ahead of U.S. sanctions on the Iranian energy sector, which kicked in earlier this month and were expected to contribute to tighter global oil supplies. Instead, the U.S. granted eight countries temporary waivers , allowing them to continue buying Iranian oil.
The oil market will get updates on U.S. and global supply and demand from key reports due out this week from the Energy Information Administration, OPEC and the International Energy Agency.
Read for more: OPEC mulls oil output cuts as risk of global glut grows
“Exemptions [for Iran] granted by the U.S. mean that these outages are considerably smaller than expected. What is more, U.S. oil production is rising faster than had been thought. The combination of these factors means there is a risk of a sizeable oversupply on the oil market late this year and next year,” said analysts at Commerzbank in a note.
Natural-gas prices NGZ18, +5.81% meanwhile, continued their march higher, with the December contract up 1.9% at $3.788 per million British thermal units Monday, its highest finish in nearly two years as traders fretted over tight supplies and cold weather.
Read: Natural gas rallies to highest finish in nearly 2 years
Read: Saudi Arabia ponders a future without OPEC
December gasoline RBZ8, -0.46% rose 0.9% to $1.637 a gallon. It shed over 5% for the week to trade at its lowest since October 2017. December heating oil HOZ8, -1.67% fell 0.8% to $2.156 a gallon.
—Christopher Alessi contributed to this article.
Story by Mayra P. Saefong from MarketWatch.
marketwatch.com 11 12 2018 19:23 GMT
We invite all our readers to share with us
their views and comments about this article.
Write to firstname.lastname@example.org
By using this link, you agree to allow PW
to publish your comments on our letters page.
Any question or suggestions,
please write to: email@example.com
Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels