Oil mixed as dollar scales early 2017 peak

Economies.com
2018-11-12 19:47PM UTC

Oil futures tilted lower in American trade with US crude declining for the 11th session in a row, the longest such stretch of losses since mid-1984, settling thereafter near nine-month lows, while Brent steadied near seven-month lows, as the dollar index scaled January 2017 highs. 

 

Markets are pricing in a decision by Saudi Arabia to cut output by 500 thousand bpd in December and President Donald Trump's criticism of that decision. 

 

As of 06:59 GMT, US crude futures due in December shed 0.17% to $60.09 a barrel, while Brent January futures inched up 0.26% to $70.36 a barrel, as the dollar index rose 0.65% to 97.53 against a basket of major rivals. 

 

US President Donald Trump called on Saudi Arabia and OPEC to not cut output, believing that prices should be lower based on demand and supply foundation, which comes a week after the US reinstated sanctions on Iranian oil exports, with the Trump's administration counting back then on Saudi Arabia to fill Iran's void in the market. 

 

Recent reports indicated a consensus in OPEC on cutting output by a million bpd next year to maintain market balance, with Saudi Arabia taking center stage with half a million cut. 

 

OPEC President And UAE energy minister Suhail Al Mazroui assured the organization is capable of increasing output any time to counter any possible shortages. 

 

Otherwise, Russian energy minister Alexander Novak stated no decision has been taken yet on extending the deal to cut global output to next year, adding that despite US sanctions on Iran, the market remains balanced. 

 

Iran Sanctions 

 

Otherwise, as US sanctions went into effect on Iranian oil exports starting November 4, eight countries were granted waivers for 180 days, mainly China, India, South Korea, Japan, Italy, Greece, Taiwan, and Turkey, already the largest importers of Iranian oil. 

 

In Russia, output rose to a new record of 11.41 million bpd in October, after averaging 11.36 million bpd in September. 

 

US Oil Rig Count 

 

Baker Hughes, a US oil services company, reported an increase of 12 rigs in the rig count to a total of 886, the highest since March 2015. 

 

Otherwise, Federal Reserve Bank of San Francisco President Mary Daly spoke about the economic outlook at the Regional Economic Development for Eastern Idaho Conference, earlier today.

 

The Federal Reserve voted at the November 7-8 meeting to maintain interest rates at below 2.25% as expected by market analysts, while vowing to carry on the path of policy tightening.  

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