Oil prices volatile in Monday trading

The West Texas Intermediate contract for the same month, the US marker grade, lost as much as 2.2 percent to $40.96 a barrel.

Situations are not becoming better even though there has been reduction in the number of U.

Oil dropped to the lowest level in nearly three months as government data showed US crude inventories rose to the highest for this time of year since 1930. Brent crude, the global benchmark for oil prices, fell 0.34 percent to $44.51 for January delivery on the London ICE Futures Exchange.

The strength of the US dollar, near seven-month highs, has a negative impact on crude prices, making oil and other commodities more expensive for holders of other currencies. It ended down 21 cents at $40.54 on Thursday, after dipping to $39.89 during the previous session, its lowest since August 27.

“With the stronger United States dollar, all of copper, gold and oil fell after Asian trading began… there were also a few selloffs which were not made last Friday“, said Kang Yoo-jin, commodities analyst at NH Investment and Securities in Seoul.

The breakin USA elementary futures below $40 a barrel exacerbated the selling’s speed, the Lawler of CMC explained.

Venezuela oil minister Eulogio del Pino said that the Organization of the Petroleum Exporting Countries (OPEC) must take action to stabilise the crude market soon.

Algeria’s energy earnings are forecast to fall to $26.4 billion next year while foreign exchange reserves will dip to $121 billion after low oil prices cut into the OPEC nation’s economy, Finance Minister Abderrahmane Benkhalfa said on Sunday. Looking at the Oil price chart below, the markets looks to have found a temporary, if not longer price support floor near $40.

“Oil markets are really moving range bound … mainly because fundamentals have yet to change”, said Daniel Ang, an investment analyst at Phillip Futures Pte Ltd. “Markets are a bit fearful that Iranian oil could come in”.

Oil prices were higher in Asia Friday, but gains were limited in a market burdened by a persistent oversupply.

The announcement could be seen as a message to OPEC, which is meeting on December 4, that Russian Federation is not willing to cut production, according to Reuters.

Oil futures were hovering at a 2 1/2-month low Monday morning in NY after a brief uptick following the Saudi remarks. We are destroying the price of crude oil.

In Singapore, EY analyst Gupta said a global supply glut and fears of a slowing European economic recovery were persisting, putting downward pressure on prices.