|
 After a volatile week's trading, much is riding on Sunday's meeting
between Venezuelan Oil Minister Eulogio Del Pino and his Saudi
counterpart Ali al-Naimi in Riyadh, after Del Pino's discussions
with the Qatari and Omani ministers this week.
As cash-strapped Venezuela tries to rally support for concerted
action between members of the Organization of the Petroleum
Exporting Countries to boost prices, Sunday's meeting is seen "make
or break" for a possible deal, said Tim Evans, energy futures
specialist at Citi Futures.
Adding to this week's rollercoaster ride in prices was the sudden
liquidation of a $600 million leveraged fund bet on falling prices.
Investors were also weighing a string of conflicting indicators on
Friday as the dollar <.DXY> recovered some of the ground lost over
the past two days while investors continued to fret about growing
oversupply, with U.S. inventories hitting record highs last week
amid concerns about a slowing global economy.
The pickup in the market earlier this week was not really warranted,
Gene McGillian, senior analyst at Tradition Energy said, referring
to the market seemingly brushing aside extremely bearish inventory
data earlier this week. [EIA/S]
"Today when the dollar tried to push up, which I attribute mostly to
a little weekend covering, you started to see some sellers come back
in the oil markets," he said.
Global benchmark Brent crude futures <LCOc1> settled down 40 cents,
or 1.2 percent at $34.06 a barrel, after trading between $35.14 and
$33.81.
U.S. crude futures <CLc1> closed 83 cents, or 2.6 percent lower, at
$30.89 a barrel, after touching a high of $32.45. The contract fell
slightly lower to $30.63 in post-settlement trading.
Prices briefly turned positive after data showed U.S. energy firms
this week deepened their oil rig cuts in the seventh week of
declines, to the lowest levels in nearly six years.
[to top of second column] |
Both contracts were stuck in a narrow $1.50 range through the
session but ended lower as hopes of an OPEC-led production cut that
boosted prices in January have faded and concerns about a global
supply glut have returned.
In a sign that low prices are having a limited impact on production,
only around 100,000 barrels per day of oil production has been shut
in globally to date - about 0.1 percent of global output, industry
research group Wood Mackenzie said on Friday.
Morgan Stanley warned on Friday that a rebalancing in the oil market
may not occur until mid-2017.
As markets try to balance themselves, it will likely lead to further
volatility as investors close excessive positions, ABN Amro said in
a note.
In a sign that optimism had not fully returned to the market, money
managers cut their bullish wagers on U.S. crude oil in the week to
Feb. 2, data from the U.S. Commodity Futures Trading Commission
(CFTC) showed on Friday.
(This version of the story corrects percentage change for U.S. oil
to down 2.6 percent in paragraph 9)
(Additional reporting by Ahmad Ghaddar in London and Henning
Gloystein in Singapore; Editing by Marguerita Choy and Lisa
Shumaker)
[© 2016 Thomson Reuters. All rights
reserved.] Copyright 2016 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
