NEW YORK (DTN) -- New York Mercantile Exchange spot-month oil futures settled shallowly mixed this afternoon with West Texas Intermediate crude and Brent on the Intercontinental Exchange reversing higher on technical support after Friday's selloff and on a positive news spin on crude oil output by the Organization of the Petroleum Exporting Countries.
"There wasn't much trade today because speculative volume was down but crude was in recovery mode after the selloff we saw on Friday, and I think people are holding off on doing business ahead of so much data scheduled for this week," said analyst Phil Flynn at Price Futures. Others agreed.
"The market came off hard last week, but I think some of the upside was due to the positive tone set by news that Saudi Aramco will cut its November exports by about 560,000 bpd," said analyst Tom Bentz at ABN AMRO. "A reduction of 560,000 bpd may not be much and maybe that's why Brent is up only slightly, but it's a positive tone and the fact that OPEC keeps hinting that they may resort to extraordinary measures to support the price shows they are on the same page."
Mohammad Barkindo, the secretary-general of OPEC, said in a speech delivered in London that the cartel has made a lot of progress in its efforts to rebalance the market and stabilize oil prices by largely complying with its agreement with 10 non-OPEC producers to cut 1.8 million bpd through the first quarter next year.
As a consequence of the OPEC-led oil supply cuts, Barkindo said, "the process of global destocking continues, both onshore and offshore, with positive developments in recent months showing not only a quickening of the process, but [also] a massive drainage of oil tanks across all regions."
He said crude oil in floating storage is down an estimated 40 million bbl since the start of 2017, and the supply overhang in the 35 nations that make up the Organization for Economic Cooperation and Development has been cut by half to 170 million bbl above their five-year average.
"These strong and positive signs are evidence that the fundamentals of supply and demand are gradually, but steadily returning to balance," he said.
OPEC will meet again in Vienna on Nov. 30 to discuss the agreements and probably decide whether to extend it for the rest of 2018 rather than let it expire in March 2018, an issue that has been the subject of informal debate.
Meantime, Hurricane Nate has largely gone after making landfall along the Louisiana and Mississippi coasts this past weekend. However, the Bureau of Safety and Environmental Enforcement said 85.09% of Gulf of Mexico oil was shut down due to the storm. Some 142 production platforms in the Gulf of Mexico or 19.3% of offshore platforms remain evacuated.
The market now looks ahead to a raft of monthly and weekly oil supply data due this week.
OPEC's Monthly Oil Market Report for October and the U.S. Energy Information Administration's Short-term Energy Outlook are both set for release on Wednesday while the International Energy Agency will issue its Oil Market Report on Thursday. EIA also is set to issue its Weekly Petroleum Status Report on Thursday, delayed a day due to today's federal holiday.
At settlement this afternoon, NYMEX November WTI futures gained 29cts to $49.58 bbl, holding above support at $48.73 bbl. December Brent crude on the ICE platform settled 17cts higher at $55.79 bbl. NYMEX November ULSD futures eased 0.87cts to settle at $1.7352 gallon and November RBOB futures ended flat, settling up 0.06cts at $1.5594 gallon.
George Orwel can be reached at email@example.com
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