Oil Futures Soften as OPEC+ Hints at Delaying Hike

Liubov Georges
By  Liubov Georges , DTN Energy Reporter

WASHINGTON (DTN) -- Nearby delivery month RBOB and ULSD futures on the New York Mercantile Exchange and the December Brent contract on the Intercontinental Exchange declined modestly in afternoon trade Monday, while the November West Texas Intermediate crude contract finished little changed on a weakening U.S. dollar and pledges from the Organization of the Petroleum Exporting Countries and Russia-led partners to fully support market rebalancing even though global demand is recovering slower than previously thought.

"The market is extremely fragile. We see rising uncertainty in winter months due to the second wave of coronavirus infections, which will complicate the ongoing recovery for global demand," said Russia Energy Minister Alexander Novak during Monday's virtual meeting by the Joint Ministerial Monitoring Committee (JMMC).

The OPEC+ committee made no recommendations on the current production agreement, which is set to step down 2 million barrels per day (bpd) from current production cuts of 7.7 million bpd on Jan. 1, 2021. JMMC is scheduled to again meet Nov. 16-17, and expectations are that the committee will recommend oil ministers delay implementing the 2 million bpd hike when they meet Nov. 30-Dec. 1.

In financial markets, stocks on Wall Street slumped as investors saw little signs of progress towards reaching a fiscal stimulus package before presidential elections on Nov. 3, with House Speaker Nancy Pelosi setting a 48-hour deadline for reaching agreement on a relief package. The speaker has refused to budge from her demand for a $2.2 trillion stimulus, with the White House's last offer at $1.8 trillion, although the Republican-controlled Senate is not on board with the White House offer, instead planning a vote on a $500 billion relief package this week.

Further weighing on market sentiment, Oxford University published a study Monday revealing that patients previously infected with the virus continued to experience symptoms months after diagnosis with persistent inflammation in vital organs.

On the session, November WTI futures settled little changed at $40.83 barrel (bbl), with December delivery ending at a 23 cents premium to the November contract ahead of expiration Tuesday afternoon. The December Brent contract on ICE settled down 31 cents at $42.62 bbl. NYMEX November ULSD futures declined 2.1 cents to $1.1581 gallon and November RBOB futures slipped 0.65 cents to $1.1623 gallon. The U.S. Dollar Index ended down 0.250 at 93.429.

Liubov Georges can be reached at liubov.georges@dtn.com

Liubov Georges