Oil Prices Drop but Still Near 12-Week High on OPEC+ Cuts
Investing.com
Published Dec 09, 2019 15:25
Investing.com - Oil prices dropped on Monday in Asia but are still near 12-week highs after OPEC+ agreed to bigger output cuts than expected.
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U.S. Crude Oil WTI Futures lost 0.5% to $58.91 by 11:20 PM ET (03:20 GMT), while International Brent Oil Futures dropped 0.3% to $64.19.
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During Friday’s meeting, Saudi Arabia agreed to provide 400,000 bpd of their own cuts, a significant supply cut beyond what was agreed to with fellow OPEC+ members, if OPEC+ averaged its part of 1.7 million bpd through the first quarter of 2020. Crude prices surged on the news, with the U.S. WTI jumping 7.3% on the week. It was WTI’s largest weekly gain since mid-June. U.K. Brent gained 3.1% on the week.
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Goldman Sachs raised its 2020 Brent forecast following the move, adding that it sees a change in OPEC+ strategy to managing short-term physical imbalances.
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Oil prices retreated today as data showed exports in China declined for the fourth consecutive month, raising concerns that demand for oil might fall.
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The data came as Beijing and Washington aim to reach a “phase one” trade deal that has so far remained elusive ahead of a Dec. 15 deadline, when additional tariffs will be imposed on Chinese goods.
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The U.S. and China are the world’s biggest oil importers.
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“The soft Chinese numbers have outweighed the OPEC+ cuts, once again reinforcing the heavy focus on demand at present,” said Howie Lee, an economist at Oversea-Chinese Banking Corp in a Bloomberg report. “With just a week left before a fresh set of U.S. tariffs kick in, there’s also a bit of apprehension in the market.”
Written By: Investing.com
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