Crude just had its worst month in a decade

      Published on Monday, 3 December , 2018      103 Views     
Crude just had its worst month in a decade


Last month was crude oil’s worst in a decade, battered by supply concerns and global politics.



West Texas Intermediate, or U.S. crude, lost 21 percent in November, tumbling to its lowest level in a year and logging its worst performance since October 2008.

After sinking below $50, the days ahead could bring some relief, according to Helima Croft, global head of commodity strategy at RBC Capital Markets.

This week, the cartel of oil producing nations known as OPEC will make a decision on future levels of production that may determine where prices head in the near term.

“What we really need to get on the path to $60 is we need to see a substantial cut coming out of OPEC… at the Thursday meeting,” Croft told CNBC’s “Futures Now” on Thursday. “We anticipate that OPEC will pull a significant quantity of barrels, at a minimum a million barrels.”

OPEC, which includes top producer Saudi Arabia, is set to meet in Vienna on Thursday. Along with non-OPEC member Russia, oil producing countries are expected to agree to a supply cut to counteract tumbling oil prices.

“The one cloud over this is really Saudi Arabia and their relationship with President Trump,” added Croft. “President Trump has made the explicit ask to Saudi Arabia to keep the taps open, so at the eleventh hour that they potentially try to force the Saudi crown prince to keep the barrels on the market,” she said. “I think that’s the big concern.”

‘A big tax cut’

Last month, Trump tweeted his thanks to Saudi Arabia for lower oil prices, calling crude’s drop a “big tax cut for America.”

The president was criticized for his siding with Saudi Arabia following the kingdom’s suspected involvement in the murder of journalist Jamal Khashoggi.

Croft said that Saudi Arabia will probably act in their “economic self-interest” and agree to a production cut at the OPEC meeting — though they will have to walk a tightrope to avoid offending Trump.

The International Monetary Fund estimates Saudi’s breakeven point at $88 a barrel for Brent oil, which is almost half of current levels.

If OPEC’s smaller producers join Saudi in agreeing to a production cut, crude oil could surge, Croft told CNBC.

“We heard that Russia will probably go along and then there are these countries that have exemptions – Libya, Nigeria, will they participate in a cut?” she asked. “If they do something higher around 1.5 million, I think that’s a catalyst on Friday to start moving higher,” explained Croft.

Some oil producers have been hesitant to cut production and potentially cede their market share.



The U.S. continues to produce at a record pace, with output recently setting an all-time high above 11 million barrels per day.

Keywords:
Category Business | 2018/12/03 latest update at 1:00 PM
Source : CNBC | Photocredit : Google
104 Views
Comments Add comment



Related Articles

The editorial staff of Saudi Arabia Today would like to give all of its readers from Gulf and Saudi Arabia and the whole world the opportunity to participate actively in the development of the website! If you have something interesting, fun, scandalous - just something worth to be seen from more people. Capture it and share it in the Saudi Arabia Today with a short text.

Do you have information you want to reach our readers?

Send article/s

You can subscribe to our Facebook, Twitter and Google pages or use our RSS feed channel to always read the most important news about Saudi Arabia, the Gulf and the world.


Sponsored Publications



Saudi Alhokair’s mall unit files for IPO, offering in second quarter: sources
Saudi Arabia Saudi Arabia news

Saudi Alhokair’s mall unit files for IPO, offering in second quarter: sources

Saudi Arabia’s Fawaz Alhokair Group plans to offer shares in its shopping malls business in Riyadh in the…

Saudi Arabia new rules

Property prices continue to fall in key UAE markets

UAE banks invest Dh87 billion in Saudi Arabia, Egypt

King Salman receives dignitaries in Riyadh King

King Salman receives dignitaries in Riyadh

The Kingdom’s Grand Mufti Sheikh Abdul Aziz Al-Asheikh, senior scholars, ministers and a group of citizens called on…

Saudi King Salman reshapes country’s political and security affairs council King

Saudi King Salman reshapes country’s political and security affairs council

Saudi King Salman on Thursday announced a new list of appointees to key positions in the country’s political…

Saudi Arabia’s Prince Talal bin Abdulaziz has died King

Saudi Arabia’s Prince Talal bin Abdulaziz has died

Saudi Arabia’s Prince Talal bin Abdulaziz passed away on Saturday, family members and Saudi media said on Twitter.…

Bahraini crown prince meets Saudi officials in Riyadh King

Bahraini crown prince meets Saudi officials in Riyadh

Bahrain Crown Prince Salman bin Hamad Al-Khalifa held talks with Saudi officials in Riyadh this week. His visit…

GULF TV

Popular in GULF TV

PIRELLI “DREAMING” – THE CAL 2019 making of Full Version | Fashion Channel

1898 Views

A photographic tale of the aspirations of four women and their determination to achieve their goals, each one…

Latest videos in GULF TV

Events

Lifestyle

Culture

Sport

Science & Technology

Government