It is all eyes on OPEC as US oil prices fell for 10 consecutive days, wiping out any gains for the year.
Futures in New York slid 0.8 percent to settle at US$60.19 per barrel on Friday, a day after falling into a bear market on concerns growing supplies will overwhelm the market as the US offered several nations waivers to continue buying Iranian oil.
The plunge is expected to push OPEC and its allies into a corner as they were to gather in a highly anticipated meeting this weekend that could yield a signal on future production cuts.
‘GAME-CHANGER’
“The Iranian sanctions were supposed to be a game-changer in the market,” Scotiabank commodities strategist Michael Loewen said in Toronto.
Producers have been “attempting to pump as much oil as possible right now to soften the blow of those Iranian sanctions, yet [US President Donald] Trump comes out and gives waivers,” he said.
CONTRIBUTING FACTORS
Crude’s slump from its peak early last month to more than US$76 per barrel came as US production is at a record, OPEC output is at the highest since 2016, more Iranian crude might make it to market then previously thought and demand growth remains a concern.
West Texas Intermediate futures fell 4.7 percent this week. Total volume traded was on Friday about 44 percent above the 100-day average, while a measure of oil market volatility jumped to the highest level since late 2016.
Brent futures for January settlement fell US$0.47 to end the session at US$70.18 per barrel on the London-based ICE Futures Europe exchange, the lowest since April 9.
The global benchmark crude traded at a US$9.82 premium to West Texas Intermediate for January settlement.
ANOTHER U-TURN?
A potential agreement by OPEC to return to output cuts would mark the second production U-turn for the group this year.
For Saudi Arabia — the world’s biggest crude exporter — it would be the third time in the past few years that the kingdom has delivered a supply surge, only to quickly backtrack on it.
In other commodities trading, natural gas prices jumped 5 percent to US$3.72 per 1,000 cubic feet. That helped gas companies stem their losses.
Heating oil was little changed at US$2.17 per gallon and wholesale gasoline fell 1.4 percent to US$1.62 per gallon.
Gold fell 0.3 percent to US$1,208.60 per ounce, while silver lost 2 percent to US$14.14 per ounce and copper slid 1.9 percent to US$2.68 per pound.
Additional reporting by AP
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