Oil prices stable after OPEC signals possible further action
AMSTERDAM: Oil prices stabilised on Monday after one of the most bearish weeks in months, propped up by OPEC comments signaling the group and other producers may take further action to restore market balance in the long term.
Oil production platforms in the Gulf of Mexico started returning to service after Hurricane Nate had forced the shutdown of more than 90 per cent of crude output in the area. The prospective restarts kept price gains in check.
“Oil is having trouble to find direction. Mixed signals keep investors busy changing their minds,” said Hans van Cleef, senior energy economist at ABN Amro.
“There is a good chance that we will continue to trade a bit sideways in the coming weeks up to the OPEC meeting.”
The Organisat ion of the Petroleum Exporting Countries is due to meet in Vienna on November 30, when it will discuss its pact to reduce output in order to prop up the market.
OPEC Secretary- General Mohammad Barkindo said on Sunday that consultations were under way for an extension of the agreement beyond March 2018 and that more oil-producing nations may join the supply pact, possibly at the November meeting.
Oil is having trouble to find direction. Mixed signals keep investors busy changing their minds. Hans van Cleef, senior energy economist
He also said OPEC members and other producers may have to take some “extraordinary measures” to ensure the market is in balance in the long term.
Global benchmark Brent crude was down 28 cents at US$ 55.34 a barrel at 0938 GMT. Last week, Brent dropped 3.3 per cent, its biggest weekly loss since June 2016.
US West Texas Intermediate crude futures CLc1 were trading at US49.32, up 3 cents. WTI’s losses last week came to 4.6 per cent.
Market sentiment remains strong. Money managers raised their bullish bets on US crude futures for the third week in a row, the US Commodity Futures Trading Commission reported on Friday. — Reuters