The light, sweet crude oil price for January delivery briefly slipped below $50/bbl during Nov. 29 trading, but it bounced to $51.45/bbl by closing, up $1.16. The day’s low was $49.53/bbl compared with the day’s high of $52.50/bbl.
The Organization of Petroleum Exporting Countries and some non-OPEC producers, led by Russia, will discuss production levels during a G20 meeting in Argentina Nov. 30-Dec. 1 in preparation for a Dec. 6-7 OPEC meeting in Vienna.
Ole Hansen, head of commodity strategy at Saxo Bank, said the G20 meeting in Buenos Aires is “a virtual sideshow to the main events—the crunch meetings,” between high-ranking officials of various governments to discuss trade issues and oil policy.
Gatherings are expected between China and US officials with separate gatherings between officials from Russia and Saudi Arabia.
Major oil producers are expected to discuss whether to cut production by as much as 1.5 million b/d from the collective output of OPEC and others cooperating with OPEC. Oil prices have declined more than 30% in less than 2 months.
“Taking the stairs up and the elevator down best describes the price behavior in crude oil these past couple of years,” Hansen said. He said Saudi-Russian talks to cut oil production could be supported if US-China trade talks during the Buenos Aires meeting were to lessen tensions.
Saudi Arabia Oil Minister Khalid al-Falih is lobbying OPEC members and Russia to join the proposed production cuts to support oil prices.
Some OPEC members believe Saudi Arabia is being influenced by US President Donald Trump who publicly has called for the cartel to keep oil prices low by producing more oil.
Energy prices
The February light, sweet crude contract on NYMEX closed Nov. 29 at $51.62/bbl, up $1.13.
Natural gas futures for January fell 5¢ to close at a rounded $4.65/MMbtu on Nov. 29.
Ultralow-sulfur diesel for December edged up less than 1¢ to a rounded $1.84/gal. The NYMEX reformulated gasoline blendstock for December increased nearly 6¢ to a rounded $1.45/gal.
Brent crude oil for January gained 75¢ to $59.51/bbl on London’s International Commodity Exchange. The February contract rose 82¢ to $59.91/bbl. The gas oil contract for December was $559.75/tonne, down $6.25.
OPEC’s basket of crudes for Nov. 29 averaged $58.09/bbl, down $1.16.
Contact Paula Dittrick at [email protected].
