Crude prices rebound after Saudis deny report of higher OPEC+ production

Oil prices recovered some of the initial losses on Monday after the Saudi Arabia denied a report that it was discussing an increase in oil supplies with the OPEC and their allies.

crude oil futures Brent for January they fell 17 cents, to $87.45 a barrel.

West Texas Intermediate crude futures (WTI) from the United States for December closed at $79.73 a barrel, down 35 cents before contract expiration later Monday. The more active January contract fell 7 cents to $80.04 a barrel.

Both benchmarks had fallen more than $5 a barrel earlier in the day, hitting 10-month lows, after the Wall Street Journal reported that a rise of up to 500,000 barrels a day would be considered at the OPEC+ meeting on December 4.

Oil later rebounded from those losses after Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman, said the kingdom is sticking with production cuts and not discussing potential measures to balance the market amid falling prices. prices, state news agency SPA reported, denying the WSJ report.

This turned the whole situation upside down in a matter of minutes,” said John Kilduff, a partner at Again Capital LLC in New York. “The Saudis give and then they take.”

The release of more oil against a backdrop of weak fuel demand from China, coupled with a stronger US dollar, would have sent the market into a deeper contango, encouraging more oil to be stored and pushing prices further lower. lower, said Bob Yawger, director of energy futures at Mizuho. “That’s playing with fire”

The number of new Covid cases in China remained near April highs as the country battles outbreaks in its major cities.

“Apart from the weakening demand outlook due to China’s Covid cuts, the rally in the US dollar today is also a bearish factor for oil prices,” said CMC Markets analyst Tina Teng.

The immediate month Brent crude futures spread narrowed sharply last week, while WTI went into contango, reflecting concerns about declining supplies.