Oil stemmed its slump into a bear market after Opec and its allies started laying the groundwork to cut supply in 2019, reversing an almost year-long expansion. West Texas Intermediate crude futures jump as much as 1.3% in New York to $60.97 a barrel after sliding 4.7% last week for a fifth weekly decline; Brent added 1% to $70.88.
Oil has collapsed into a bear market in little more than a month, and pressure is mounting on the Opec+ group to act sooner than their policy meeting in December.
Saudi Arabia will export 500,000 fewer barrels a day in December than this month, taking the lead in Opec to counter the price rout “We as responsible producers are going to work, and work hard, to balance the market within a reasonable corridor,” Saudi energy minister Khalid Al-Falih told reporters on Sunday in Abu Dhabi. Demand for Saudi oil is “tapering off” in part because of seasonal factors, so the kingdom will ship less, he said.
While its meeting with other producers on Sunday yielded no change in supply policy, Opec+ warned in a statement that it might need “new strategies”, raising the prospect of a wider and coordinated cut in 2019. Although there are signs of a glut emerging in the US, the Saudi minister said it was too early to talk about coordinated production cuts within Opec+.
Counterparts from Russia and the United Arab Emirates echoed that sentiment.
Total WTI volume traded was about 114% above the 100-day average on Monday WTI fell for 10 consecutive days through Friday, wiping out any gains for the year WTI has fallen more than 20% from its recent peak of $76.41 in October, a definition of a bear market.