The last week of autumn began with recovery in prices after a serious fall on the previous Friday.

January futures price for North Sea oil Brent rose by 1.39% to $ 59.86 per barrel. The price of January futures for WTI crude oil increased by 1.03%, to 50.94 dollars per barrel. A week before, Brent oil fell by almost 12%, WTI - by 10%, which was the strongest weekly decline since January 2016. Analysts attributed the volatility of oil prices with the fears of an oversupply of these raw materials on the market while simultaneously slowing down the growth in global demand. MarketWatch cites the opinion of senior market analyst Oanda Craig Erlam that oil prices remain under pressure, despite signals from some OPEC countries, primarily Saudi Arabia, about a new possible coordinated reduction in production at the next meeting in two weeks .

On Tuesday, oil quotes stabilized. The pressure on the market was made by the record volume of oil production in Saudi Arabia. In November, Saudi Arabia broke the record for oil production (11.1–11.3 million barrels per day). At the same time, the kingdom is promoting the idea of the need to reduce oil production. The Saudis themselves will be able to reduce production by 500,000 barrels per day. However, the optimism about the upcoming meeting of OPEC countries was stronger. The price of Brent rose 10 cents to $ 60.58 a barrel. The price of light American oil remained unchanged - $ 51.63 per barrel.

On Wednesday, Saudi Arabia’s energy minister, Khalid al-Falih, said the kingdom would not single-handedly reduce oil production to stabilize the market, adding that the Organization of Petroleum Exporting Countries would do everything necessary for this, but the efforts should be collective. Al-Falih, who met with Nigerian oil minister Emmanuel Ibe Kachikva, called favorable signals from other OPEC members, including Iraq, Nigeria and Libya, on the eve of the organization’s summit in Vienna on December 6. According to him, all ministers seek to return stability to the markets. At the same time, Kachikwu said that it is too early to say whether Nigeria will take part in reducing production. Al-Falih expressed the hope that meetings between representatives of OPEC countries in the near future will contribute to achieving consensus to stabilize the market.

The positive pause was short-lived. Oil prices resumed falling after statements by Russian President Vladimir Putin, who signaled about reluctance to cut production to balance the market. Slightly more than a day Brent quotations fell by 3.64 dollars, or 5.9%, and at the auction on Thursday, January futures slipped to a new low since October 2017 - 57.78 dollars per barrel. WTI futures for the United States fell below $ 50 for the first time in 13 months. According to the IEA, OPEC and the US Department of Energy, the oil market is again in a mode of excess production, the volume of which is estimated from 1 to 1.4 million barrels per day (for 2019). But Russia is satisfied with oil at 60 per barrel, Putin said on Wednesday, speaking at the “Russia Calling!” Forum. This price is “balanced and fair,” the president said, adding that shale production in the United States is profitable at $ 35–45 per barrel, and based on this level ($ 40), the Russian budget is set. Putin’s statements were perceived by the market as a signal that at current prices Russia is not set to actively lower production.

On Friday, the market observed a strengthening of oil prices. This was facilitated by the expectations that the Organization of Petroleum Exporting Countries (OPEC) and Russia next week will agree to impose restrictions on oil production in one form or another. ANZ Bank on Friday announced that the price increase is a clear indication that the OPEC + group is approaching an agreement on limiting oil production.

 

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