Brent rises, United States crude struggles to hold $40 before contract expiry

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. WTI opened trading in NY at $39.95 per barrel.

Futures rose as much as 2 per cent in NY after the report by the Saudi Press Agency. In response to the question of how low oil prices could go next year if Opec fails to take action, del Pino said “mid-20s”. Slowing in the Asian economies has put downward pressure on crude oil prices, with Chinese stock woes in midsummer pulling oil lower.

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. A growing discount between the front month and forward contracts which traded near a record wide 8 per barrel has sparked talk of traders storing more crude in the hope of delivering later at higher prices.

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

January Brent futures were down 23 cents to just over $44.43 per barrel.

Last week, the USA energy department reported the country’s crude inventories increased by 0.3 million barrels in the week ended November 13.

However, analysts say market participants remain nervous that oil majors, particularly those in the Organization of the Petroleum Exporting Countries, will continue to ramp up output amid low prices for the sake of defending market share. It hit $40.96 a barrel earlier in the session, near levels seen on Friday before the USA crude December contract expired. He said markets were waiting for the OPEC meeting to see if the cartel “really means business” to trim production.

In nearly all of its investor presentations this year, EOG has said it can turn a profit at prices at or below the prevailing oil price at the time of the presentation.

“The Saudi statement doesn’t signal a policy shift, but there are so many short positions out there, which is making the market very sensitive”, Michael Corcelli, chief investment officer of hedge fund Alexander Alternative Capital in Miami, said by phone.

Saudi Arabia and Qatar are considering Venezuela’s proposal for an equilibrium price of $88 a barrel, Venezuelan Oil Minister Eulogio Del Pino told reporters on Sunday in Tehran.