Putin Says $60 Oil 'Absolutely Fine,' Praises Saudi Crown Prince

Cornelia Mascio
Dicembre 6, 2018

The price is still set for its biggest one-month fall in November since the depths of the financial crisis in 2008, having lost more than 22 percent so far. This indicates at a possible trench being created by the oil marketing companies to form a buffer in case the oil prices increase again.

Implied volatility, a gauge of options demand, soared, with US crude implied volatility hitting its highest level since February 2016 last week.

Last week the prices of crude oil in the United States fell by 10 % that research analysts at FXTM called as brutally bearish.

"President Trump's tacit support of Crown Prince Mohammed bin Salman (known as MbS) in the wake of the Khashoggi murder seems to have provided him with significant leverage over the Saudi leadership", Capital Economics analysts said in a note.

The Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC) will on December 6 meet at its headquarters in Vienna, Austria, to agree a joint output policy. Wise stated that that would depend on the severity of cuts adopted by OPEC and its allies.

Brent crude, the global benchmark, fell 27 cents to $59.94 a barrel at 1119 GMT after trading as high as $61.27.

The price of Brent has slumped by more than 30 percent from a four-year high above $86 in early October, pressured by concerns that supply will exceed demand in 2019 as economic growth slows.

Saudi Arabia will not act alone to steady oil markets, Energy Minister Khalid Al-Falih told reporters in Abuja yesterday ahead of what will be a key week for the global oil market.

Once a consensus is reached, more countries may come forward towards cutting down on oil production.

Adding to the uncertainty in the oil markets were President Vladimir Putin's comments.

Worldwide benchmark Brent crude LCOc1 gained 6 cents, or 0.1 percent, to $58.82 a barrel, having dropped 2.4 percent on Wednesday to $58.76 a barrel. "It led to positive results". Gasoline futures prices dropped by 1.6% to trade at $1.3979 per gallon.

US crude stockpiles went through a 10th straight week of increase, up 3.6 million barrels in the week ending on November 23, piling concerns over supply surplus and sagging demand growth, according to a weekly EIA report released on Wednesday. This sudden turn of events has surprised market analysts who were anxious about prices hitting $100 per barrel and are now faced with sudden price collapse.

A director with Tortoise, Nick Holmes, who manages a portfolio in energy that is over $16 billion, this report shows an increased build in relation to the market consensus on crude stockpiles in the US.

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