NYMEX Crude $ 49.58 UP $.2900
NY Harbor ULSD $1.7352 DN $.0087
NYMEX Gasoline $1.5594 UP $.0006
Oil futures ended slightly higher Monday, finding some support after OPEC’s secretary-general said the cartel and other oil producers might need to take additional measures in 2018 to rebalance the oil market.
December Brent crude, the global oil benchmark rose 17 cents, or 0.3%, to close at $55.79 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate crude for November deliveryadded 29 cents, or 0.6%, to settle at $49.58 a barrel.
Mohammad Barkindo, secretary-general of the Organization of the Petroleum Exporting Countries, on Sunday said there was a “growing consensus” that a rebalancing process was under way. To sustain that process into next year, “some extraordinary measures may have to be taken,” he told reporters at an oil industry forum in New Delhi, according to Reuters. Those remarks, which implied extending, or deepening, the curbs agreed by OPEC and non-OPEC producers, appear “to have provided support for th e markets to open this week’s trading,” said analysts at Tradition, in a note. Otherwise, traders were largely in wait-and-see mode ahead of the release of oil market data from OPEC on Wednesday and the International Energy Agency on Thursday.
Crude prices stabilized after falling more than 2% on Friday, as around 90% of U.S. oil infrastructure was shut down in the Gulf of Mexico in preparation for Hurricane Nate, which ended up having little effect on the U.S. oil market. Some U.S. export terminals have already reopened, according to analysts. But the closures will distort U.S. inventory data, making it more difficult to assess the American oil market, analysts said. Analysts said upside might be limited unless more concrete details emerge regarding the intentions of OPEC and other major producers. “There appears to be growing doubt among market participants as to whether the price rise of recent weeks is justified,” said Commerzbank analysts in a recent note. ”Among other things, this was due to the possible extension of the production cuts until the end of 2018.”
Brent hit a two-year high earlier in October on positive sentiment about OPEC’s effort to rebalance the market and eliminate about 2% of global supply with the help of external producers such as Russia.
A high-level meeting between OPEC member Saudi Arabia and Russia on Thursday yielded few commitments regarding an extension of the cuts into the second half of next year and investors dialed down their expectations for a continued supply action. Although global stockpiles have fallen, they remain well above the five-year average the cuts have set as a target.
Meanwhile, President Donald Trump is expected to refuse to certify that Iran is in compliance with the 2015 international nuclear agreement, which could trigger additional U.S. sanctions against Tehran. In the past Trump has called the accord “the worst deal ever.” “The U.S. might decertify Iran and that is another thing that we will be watching for. It can bring an additional layer of geopolitical uncertainty,“ said Olivier Jakob, managing director at oil consultancy Petromatrix. Iran boosted its oil production after international sanctions against the nation were removed in early 2016 as part of a nuclear deal with six world powers.
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Fuel Manager Services, Inc.
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