Oil Nudges Higher as Investors Digest Losses
November 19 2018 - 06:23AM
Dow Jones News
By Sarah McFarlane
-- Oil prices edged higher Monday morning, digesting last week's losses, as
indications the Organization of the Petroleum Exporting Countries may cut
output at its next meeting helped support the market.
-- Brent crude -- the global oil benchmark -- was trading up 0.3%, at $66.92
a barrel, midmorning on London's Intercontinental Exchange, having lost
around 6% in value last week.
-- West Texas Intermediate futures, the U.S. oil standard, were trading up
0.4%, at $56.94 a barrel, on the New York Mercantile Exchange.
HIGHLIGHTS
U.S. drilling: The number of active oil-directed drilling rigs
in the U.S. rose by two, taking the total to 888, weekly data
published by Baker Hughes on Friday showed. Drilling activity is
the highest level since March 2015, as the U.S. pumps record
amounts of crude.
INSIGHT
OPEC: After ramping up production in recent months, the
Organization of the Petroleum Exporting Countries and their allies
including Russia will meet on Dec. 6 to discuss cutting output,
with the recent price collapse indicating the market may now be
over supplied. "As we head into year-end there's a little bit of
concern that there's too much supply relative to demand," said
Michael Hewson, chief market analyst at brokerage CMC Markets.
"What we're looking for is the Saudi's to put a floor under
prices...the question is will they be able to cut by a sufficient
amount to arrest the slide."
Selloff: Last week's sell off in oil markets, triggered by a
combination of more Iranian crude being available to the global
market than expected, revisions higher to U.S. output and a
slowdown in global demand, has reset the outlook for oil prices,
analysts said. "It takes a brave oil trader to expect next year's
prices average above that of 2018," said Tamas Varga, analyst at
brokerage PVM.
AHEAD
-- The American Petroleum Institute releases its weekly statistical bulletin
at 4.30 p.m. Tuesday.
Write to Sarah McFarlane at sarah.mcfarlane@wsj.com
(END) Dow Jones Newswires
November 19, 2018 06:08 ET (11:08 GMT)
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