Oil Drops as Venezuela Predicted Price Drops
As seen in WorldOil Oil extended its decline as Venezuela predicted prices may drop to as low as the mid-$20s/bbl unless OPEC takes action to stabilize the market.
January futures fell as much as 1.1% in New York after front-month prices slid 0.9% last week. Saudi Arabia and Qatar are considering Venezuela’s proposal for an equilibrium price at $88/bbl, Venezuelan Oil Minister Eulogio Del Pino told reporters Sunday in Tehran. The Organization of Petroleum Exporting Countries should make room for increased Iranian crude production within its ceiling of 30 MMbopd, the nation’s Oil Minister Bijan Namdar Zanganeh said.
Oil has slumped about 45% the past year amid speculation a global glut with persist as OPEC continues to pump above its collective quota. The 12-member group meets Dec. 4 in Vienna to discuss the production ceiling as Iran signals its intention to boost output by 1 MMbopd within five to six months of economic sanctions being removed.
West Texas Intermediate for January delivery dropped as much as 47 cents to $41.43/bbl on the New York Mercantile Exchange and was at $41.52 at 8:01 a.m. Hong Kong time. The December contract expired Friday after declining 0.4% to close at $40.39, the lowest settlement since Aug. 26. The volume of all futures traded was about 32% above the 100-day average.
Brent for January settlement was 22 cents lower at $44.44/bbl on the London-based ICE Futures Europe exchange. The contract rose 48 cents to $44.66 on Friday. The European benchmark crude traded at a premium of $2.96 to WTI.