WTI Crude Oil Crashes To $53, 1-Year Lows

Oil falls after Russia preaches patience rather than production cuts

Oil prices climb on prospect of OPEC and Russian cuts

Russia's Energy Minister Alexander Novak said on Monday producers need to " better understand both the current conditions and the winter outlook" before agreeing to a supply cut.

"For a cut to be successful in supporting the market, they're going to have to present a front that is not fractured and the chance of that is looking less and less likely as December 6 approaches", said Bob Yawger, director of energy futures at Mizuho in NY.

US crude prices have now dropped as much as 30 percent from a four-year high last month.

Crude oil futures contracts for December expired at $56.76 a barrel, settling $0.30, or 0.5%, higher.

Oil shot back up following six weeks of losses as speculation of OPEC weighing bigger output cuts overshadowed signs of expanding American crude production.

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Hussein Sayed, chief market strategist at futures brokerage FXTM said US comments from APEC "suggest that a deal between President Trump and President Xi is unlikely to see the light when the leaders meet at the G20 Summit later this month".

While Saudi Arabia's Energy Minister Khalid al-Falih says that based on the OPEC+ group technical analysis, "there will need to be a reduction of supply from October levels approaching a million barrels", reports emerged last week that Russian Federation would rather stay out of any fresh oil production cuts led by the Saudis. "It is not unreasonable to anticipate stable prices until then", Tamas Varga, PVM Oil Associates strategist, said.

Prices ticked lower after U.S. President Donald Trump said the United States intends to remain a "steadfast partner" of Saudi Arabia even though "it could very well be" that Saudi Crown Prince Mohammed bin Salman had knowledge of the killing of journalist Jamal Khashoggi last month in Turkey. Total volume traded Tuesday was 40 percent above the 100-day average. The contract fell as much as 7.7 per cent earlier in the session to $52.77 a barrel, the lowest since October 2017.

Meanwhile, drillers in the USA added two more working rigs last week, bringing the total to 888, the highest level since March 2015, according to Baker Hughes data. "Recall oil prices, which had already fallen 29 per cent going into the November 2014 OPEC meeting, fell another 10 per cent the day after the meeting and were down 25 per cent the month after as OPEC disappointed on supply cuts". U.S. crude production has been rising, hitting a record in the week ended November.

Put off by a surge in supply and the slowdown in demand, financial markets have been becoming increasingly wary of the oil sector, with money managers cutting their bullish wagers on crude futures and options to the lowest level since June 2017, the US Commodity Futures Trading Commission (CFTC) said on Friday.

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