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Oil Dips After Biggest Gain in Two Months as OPEC Talks in Focus

Published 27/11/2018, 01:22 pm
© Reuters.  Oil Dips After Biggest Gain in Two Months as OPEC Talks in Focus
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(Bloomberg) -- Oil fell after rising the most in almost two months as major oil exporters prepare to discuss output policy amid rising price volatility.

Futures in New York lost as much as 1 percent after a 2.4 percent gain Monday. All eyes are on this week’s G20 meeting in Argentina, which will include Saudi Crown Prince Mohammed Bin Salman and Russian President Vladimir Putin, before OPEC meets next week in Vienna. Meanwhile, U.S. crude inventories are seen falling for the first time in 10 weeks in a Bloomberg survey before government data Wednesday.

Oil has collapsed into a bear market on fears of a supply glut amid a toxic mix of America’s unexpected sanctions waiver for Iranian oil, a record Saudi output and surging U.S. production. Also, rising trade tensions between the U.S. and China clouds the outlook for demand. Speculation is swirling over whether the Organization of Petroleum Exporting Countries and its allies will curb output despite President Donald Trump’s call for lower prices as they meet Dec. 6 in Vienna.

“A tug-of-war between President Trump and oil producers will continue through the OPEC meeting,” said Satoru Yoshida, a commodity analyst at Rakuten Securities Inc. in Tokyo. “Oil could remain volatile until the meeting, which will determine the direction of prices.”

West Texas Intermediate for January fell as much as 52 cents to $51.11 a barrel on the New York Mercantile Exchange and traded at $51.25 at 10:57 a.m. in Tokyo. The contract rose $1.21 to $51.63 on Monday after plunging about 11 percent last week, the most since January 2016. Total volume traded was 6 percent below the 100-day average. The Cboe/Nymex WTI Volatility Index fell on Monday from the highest level since early 2016 reached last Friday.

Brent for January settlement fell 27 cents to $60.21 a barrel on London’s ICE (NYSE:ICE) Futures Europe exchange. The contract added $1.68 to at $60.48 on Monday. The global benchmark traded at a $8.93 premium to WTI.

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