Oil Holds Near $57 as Investors Weigh OPEC Plans And IEA Warning

Oil falls after Russia preaches patience rather than production cuts

So far in the session, more than 868,000 front-month WTI contracts had changed hands, exceeding the daily average over the last 10 months.

On Monday, crude oil futures ended up $0.52, or 0.9%, at $57.20 a barrel.

Crude markers in NY and London have both fallen more than 20% from their October highs.

Oil's slide has been largely unimpeded since early October when WTI prices were near four-year peaks.

Despite the gains, crude prices remain nearly a quarter below their recent peaks in early October, weighed down by surging supply and a slowdown in demand growth.

The hedge fund and commodity fund money managers cut its combined futures and options positions on US and Brent crude during the week-ended November 13 to the lowest level since June 27, 2017. The global benchmark crude traded at a US$9.10 premium to WTI.

Oil traded near $57 a barrel as traders assessed OPEC's plans to cut production, while its key ally Russian Federation and a top energy adviser warned suppliers against making a hasty decision on cutbacks.

"The list of reasons for the decline are pretty specific. too much supply and a risk of slowing demand growth", said James Mick, Energy Portfolio Manager with USA investment firm Tortoise.

More news: Saudi king backs son amid furor over Khashoggi murder

As mentioned yesterday, the oil market is not yet convinced by OPEC's strategy in believing that it will prevent oversupply, despite talk of a potential cut of up to 1.4mbpd.

According to early reports, traders are expecting top exporter Saudi Arabia to push OPEC and other non-OPEC investors to cut supply towards the end of the year. "It really is a too-big-to-fail relationship", said Joe McMonigle, senior energy policy analyst at Hedgeye Risk Management in Washington.

Despite today's sharp downward trend, some analysts think that prices are set to regain ground over the next month, based on the trends from past such oil price slumps.

Oil prices pared losses briefly after data from industry group the American Petroleum Institute showed crude inventories fell by 1.5 million barrels last week to 439.2 million.

The concern related to crude oil oversupplies was intensified on Nov.5, when the US announced waivers so that eight nations could continue to buy Iranian oil despite nuclear-related sanctions announced in May, that went into effect on that day.

Expectations for a ninth straight week of US crude inventory increases also weigh on prices; seven analysts polled ahead of today's data from the American Petroleum Institute estimates crude stocks rose 2.1M barrels last week.

US crude production C-OUT-T-EIA has soared nearly 25 percent this year, to a record 11.7 million barrels per day (bpd).

The belief that OPEC may announce production cuts in a December 6 meeting in Vienna helped fuel gains at some points during the second half of last week.

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