NEW YORK, Nov 21 (Reuters) – Oil costs rebounded from early losses on Monday after Saudi Arabia denied a report it was discussing a rise in oil provide with OPEC and its allies.
Brent crude futures for January settled at $87.45, shedding 17 cents. U.S. West Texas Intermediate (WTI) crude futures for December settled at $79.73 a barrel, falling 35 cents forward of the contract’s expiry afterward Monday.
The extra lively January contract was down 7 cents at $80.04 a barrel.
Each benchmarks had plunged by greater than $5 a barrel early, hitting 10-month lows, after the Wall Road Journal reported a rise of as much as 500,000 barrels per day can be thought-about on the OPEC+ assembly on Dec. 4.
Oil then retraced its losses after Saudi Arabian vitality minister Prince Abdulaziz bin Salman stated the dominion is sticking with output cuts and never discussing a possible oil output enhance with different OPEC oil producers, state information company SPA reported, denying the Journal report.
“It turned the entire scenario the wrong way up in a matter of minutes,” stated John Kilduff, associate at Once more Capital LLC in New York. “The Saudis giveth after which they taketh away.”
The Group of the Petroleum Exporting International locations (OPEC) and its allies, collectively often known as OPEC+, not too long ago lower manufacturing targets and the vitality minister of de facto chief Saudi Arabia was quoted this month as saying the group will stay cautious.
Releasing extra oil amid weak Chinese language gas demand and U.S. greenback power would have moved the market deeper into contango, encouraging extra oil to enter storage and pushing costs nonetheless decrease, stated Bob Yawger, director of vitality futures at Mizuho in New York. “That is taking part in with hearth.”
Expectations of additional will increase to rates of interest have buoyed the dollar, making dollar-denominated commodities like crude dearer for traders.
The greenback rose 0.9% in opposition to the Japanese yen to 141.665 yen, on tempo for its largest one-day acquire since Oct. 14. learn extra
“Other than the weakened demand outlook because of China’s COVID curbs, a rebound within the U.S. greenback at this time can also be a bearish issue for oil costs,” stated CMC Markets analyst Tina Teng.
“Danger sentiment turns into fragile as all of the latest main international locations’ financial knowledge level to a recessionary state of affairs, particularly within the UK and euro zone,” she stated, including that hawkish feedback from the U.S. Federal Reserve final week additionally sparked considerations over the U.S. financial outlook.
New COVID case numbers in China remained near April peaks because the nation battles outbreaks nationwide.
The front-month Brent crude futures unfold narrowed sharply final week whereas WTI flipped into contango, reflecting dwindling provide considerations.
Reporting by Laila Kearney in New York
Extra reporting by Noah Browning, Florence Tan and Emily Chow
Modifying by Chris Reese and Matthew Lewis
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