Crude-oil futures were choppy in Asian trade Tuesday after sharp overnight losses as markets continue to look for cues that could drive prices higher. On the New York Mercantile Exchange, light, sweet crude futures for delivery in December traded at $77.19 a barrel, down $0.27 in the Globex electronic session. December Brent crude on London’s ICE Futures exchange fell $0.28 to $82.06 a barrel. Brent crude, the global oil benchmark, had settled at its lowest since October 2010 and is still under pressure after Kuwait’s oil minister said he doesn’t expect the Organization of Petroleum Exporting Countries to cut output. Traders said oil prices will remain choppy in the run up to OPEC’s highly anticipated meeting on November 27.
Meanwhile, weekly U.S. oil inventory data will be delayed by a day due to the Veterans Day holiday. On tap Wednesday is the launch of the International Energy Agency’s world energy outlook report for 2014 that will provide investors with a long-term view of energy markets. Any surprise changes in forecasts may affect oil prices. Iraq yesterday raised its December oil prices for European and Asian customers but cut the price for American buyers, mirroring moves by Saudi Arabia earlier this month that were followed by a drop in oil prices on fears of a price war in the U.S. However, Michael Wittner, head of oil research at Societe Generale said it is “flat out wrong” to blame the oil price drop on Saudi Arabia’s price adjustments. “To us, it was about market sentiment and market positioning ahead of the 24 November Iran nuclear deadline and the 27 November OPEC meeting,” he said. Asia dominates Saudi Arabia’s oil export flows with a 71% market share, and oil flows to the U.S. and Europe are small and slowly eroding, and just don’t matter that much, Mr. Wittner said. “While we keep our ears open, we still believe that the markets will be susceptible to further waves of downward pressure, until the OPEC meeting,” he said. “The markets are looking for a clear and convincing message from someone… anyone… but they are not likely to get it.”