Oil prices rise ahead of U.S. jobs, oil-rig count
London (Nov 6) Crude oil prices recouped some losses in Asia trade on Friday but will likely bob in a tight range as the market waits to take cues from the U.S. labor data and oil-rig count due later in the day.
Market sentiment went deeper into bearish mode overnight in the U.S. on oversupply concerns after reports that the Organization of the Petroleum Exporting Countries doesn’t plan on trimming output to salvage prices.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in December CLZ5, +0.51% traded at $45.54 a barrel, up $0.34 in the Globex electronic session. December Brent crude LCOZ5, +0.92% on London’s ICE Futures exchange rose $0.27 to $48.25 a barrel. Prices for both grades are down around 40% from a year earlier.
A senior OPEC delegate yesterday was reported saying the bloc is unlikely to waver from its no-cut policy unless oil producers outside of the bloc, such as Russia, were also in sync with the plan.
Oil prices have been facing tremendous pressure since last summer as supply continues to outpace demands. Despite falling oil revenues, OPEC has opted to maintain production in order to protect market share, a move mirrored by its competitors.
Earlier this week, Russia said its oil production in October hit 10.78 million barrels a day, a record high since the collapse of the Soviet Union. Saudi Arabia, the world’s largest oil exporter, also saw daily production of above 10 billion barrels in the past few months.
“Some OPEC members are feeling the fiscal pain from the persistent low prices and the market is waiting to see what will they do about it,” said Barnabas Chen, an energy researcher at OCBC.
OPEC is scheduled to hold a technical meeting on Dec. 4 in Vienna.
On the geopolitical front, traders are monitoring the continuing internal political strife in Libya, which has caused the African oil producer to cut daily production by about 70,000 barrels to 400,000 barrels a day.
Other data points to watch would be the U.S. monthly nonfarm payroll report and the weekly U.S. oil rig count reported by industry group Baker Hughes, both scheduled for release later in the global day. The U.S. rig count declined for the ninth consecutive weeks to 578, according to the last week’s report.
Nymex reformulated gasoline blendstock for December RBZ5, +2.01% — the benchmark gasoline contract — rose 84 points to $1.3694 a gallon, while December diesel traded at $1.4931, 59 points higher.
ICE gasoil for November changed hands at $450.25 a metric ton, down $1.00 from Thursday’s settlement.