Crude rebounds as United States oil rig count declines to five-year low

Kang said a stronger USA currency if US interest rates are hiked in coming months could weaken demand for dollar-denominated crude oil futures as the contracts will be considered expensive to other currency holders.

The 19-commodity index, however, managed to settle just slightly lower after tracking oil’s steady finish, which came on the back of a pledge by Saudi Arabia to work toward crude price stability. Money managers’ net-long position in WTI crude fell 17 percent in the week ended November 17 to the lowest in more than two months, data from the U.S. Commodity Futures Trading Commission show.

Futures rose as much as 1 per cent in NY.

WTI for January delivery rose 45 cents, or 1.1 per cent, to $US42.35 a barrel at 12.18pm on the NY Mercantile Exchange.

“WTI couldn’t convincingly push below $40 despite a few attempts today and that’s what probably what led to the late support before contract expiry”, said Gene McGillian, senior analyst at Tradition Energy in Stamford, Connecticut.

“It’s hard to see what else moved the price besides the Saudi statement, even though it’s exactly what Oil Minister al-Naimi said last week”, said Giovanni Staunovo, an analyst at UBS Group AG in Zurich.

While OPEC keeps pumping crude at a high pace, US production has started to tail off. Output peaked at 9.6 million barrels a day in April and has fallen to below 9.2 million barrels a day. The prices continued their rally downwards with prices of U.S plunging from more than $100 a barrel previous year. That figure is the lowest in nearly six years and is likely to add tensions at the December meeting.

Oil has slumped about 44 per cent this year amid signs a global glut will be prolonged as the Organization of Petroleum Exporting Countries continues to pump above its collective quota.

Meanwhile, Venezuela’s oil minister said on Sunday that OPEC can not allow an oil price war and must take action to stabilize the crude market soon.

Oil prices climbed in Asia Tuesday before a meeting of the OPEC oil cartel and a report on United States commercial crude inventories which will let traders gauge demand in the world’s biggest oil consumer.

OPEC meets December 4 in Vienna to discuss the production ceiling.

“The market is worn out from having looked at the production statistics and the ever increasing supply glut”, said Sucden analyst Kash Kamal.

Elsewhere, gasoline futures surged more than 1% to an intraday high of $1.304 a gallon, limiting further losses in crude.