Singapore: Oil halted a slide near $54 (Dh198.34) a barrel as investors weighed industry data that showed US crude inventories unexpectedly fell last week against doubts over plans by the Organisation of Petroleum Exporting Countries (Opec) to cut output.
Futures in New York rose as much as 1.7 per cent, after plunging more than 6 per cent on Tuesday. The American Petroleum Institute (API) was said to report a 1.55-million-barrel drop in stockpiles last week, compared with a gain forecast in a Bloomberg survey before official data.
Meanwhile, US President Donald Trump said Saudi Arabia has been “very responsive” to his requests to keep prices low, calling into question Opec’s resolve to trim supply.
Crude prices in London and New York collapsed along with equities on Tuesday amid the highest volatility since 2016. Investors fled risky assets including oil as they fretted about America’s confrontations with China over trade. With Opec and its allies scheduled to meet in Vienna early December to discuss output plans, the International Energy Agency (IEA) warned that cutting supplies may have some negative implications.
“Some investors are coming back into the market after the massive plunge,” Sungchil Will Yun, Seoul-based commodity analyst at HI Investment & Futures, said by phone. “While a lot of uncertainties lie ahead with the clouded outlook on Opec+’s output curb plans, the unexpected decline in American inventories will ease some of the downward pressure.”
West Texas Intermediate (WTI) for January delivery rose as much as 92 cents to $54.35 a barrel on the New York Mercantile Exchange, and was 88 cents higher at $54.31 at 12.56pm in Singapore. The contract sank 6.6 per cent to $53.43 on Tuesday. Total volume traded was 49 per cent above the 100-day average.
Brent for January settlement gained 1.6 per cent to $63.53 a barrel on the London-based ICE Futures Europe exchange. The contract settled 6.4 per cent lower at $62.53, the lowest close since December. The global benchmark crude traded at a $9.22 premium to WTI for the same month.
Trump said he won’t let the murder of US-based journalist Jamal Khashoggi jeopardise relations with the Saudis as oil prices may “go through the roof” if the relationship between the two nations breaks. The kingdom had previously sought curbs of about 1 million barrels a day, while Russia signalled the need for a “balanced decision.”
Meanwhile, the API was said to show nationwide crude inventories have slipped for the first time since mid-September ahead of government data due Wednesday. In contrast, a Bloomberg survey of analysts showed a 3.45-million-barrel increase last week in a median estimate.