Crude shock as oil hits 5-month low
new york — Oil prices rebounded from five-month lows on Friday following assurances by Saudi Arabia that Russia is ready to join Organisation of the Petroleum Exporting Countries (Opec) in extending supply cuts to reduce a persistent glut.
Traders also noted the technically oversold condition of the oil complex, which collapsed almost 20 per cent from recent highs in mid April, helped restrict further selling.
Brent futures were up $1.20, or 2.5 per cent, at $49.58 a barrel by 11:02am EDT, while US West Texas Intermediate crude was up $1.09, or 2.4 per cent, at $46.61 per barrel.
After falling almost 5 per cent on Thursday, both contracts continued to collapse overnight with WTI falling to $43.76, its lowest since November 15, and Brent down to $46.64, its lowest since November 30 when the Opec agreed to cut production during the first half of 2017.
Both benchmarks started to trim earlier losses after Saudi Arabia’s Opec Governor Adeeb Al Aama said that Opec and non-Opec nations were close to agreeing a deal on supply cuts. — Reuters
london — Oil prices fell to fivemonth lows on Friday on concerns about a persistent glut despite assurances from Saudi Arabia that Russia is ready to join Opec in extending supply cuts.
US West Texas Intermediate (WTI) crude oil futures fell more than 3 per cent in early trading to less than $44 a barrel, the lowest since November 14. It fell 4 per cent on Thursday.
Benchmark Brent also fell 3 per cent to below $47, its lowest since November 30, which was the date the Organisation of the Petroleum Exporting Countries (Opec) triggered a rally when it said it would cut production in the first half of 2017.
Both benchmarks trimmed losses to trade near Thursday’s close by 1320GMT after Saudi Arabia’s Opec Governor Adeeb Al Aama told Reuters that Opec and nonOpec nations were close to agreeing a deal on supply cuts.
“Based on today’s data, there’s a growing conviction that a sixmonth extension may be needed to rebalance the market, but the length of the extension is not firm yet,” the Saudi official said.
Opec sources said on Thursday that Opec is likely to extend cuts when it meets on May 25 but that a deeper cut is unlikely. Opec and
There’s a growing conviction that a 6-month extension may be needed to rebalance the market Adeeb Al Aama, Saudi Arabia’s Opec Governor
non-Opec states initially agreed to cut 1.8 million barrels per day (bpd) in the first six months of 2017.
Brent traded volumes on Thursday reached a record high of nearly 542,000 contracts, suggesting that hedge funds had accelerated reductions to their long positions.
Pierre Andurand, who runs one of the biggest hedge funds specialising in oil, liquidated his fund’s last long positions in oil last week and is running a very reduced risk at the moment, a market source familiar with the development said.
“It is now-or-never for oil bulls,” said US commodity analysis firm The Schork Report. “They either put up a defence here or risk further emboldening the bears for a run at the $40 threshold (for WTI).”
Both Brent and WTI futures are down about 17 per cent so far this year despite Opec efforts to support prices. The benchmarks are trading around levels last seen before the joint deal to cut output was first announced.