Oil prices offset some losses after the fall of "Black Friday"

SINGAPORE (Reuters) – Oil prices Monday offset losses from a nearly 8% drop the previous session, but Brent failed to stay above $ 60 a barrel on generally weak financial markets.

The Brent crude futures contract at the beginning of the month, LCOc1, rose 96 cents, or 1.6%, to $ 59.76 per barrel at 7:45 am GMT.

Futures contracts on WTI (West Texas Intermediate) CLc1 US futures rose 62 cents, or 1.2%, to $ 51.04 per barrel.

The gains partly offset Friday's sale, which traders have already dubbed "Black Friday".

In response to Friday's falls in Brent and WTI, China's crude futures in Shanghai lost their ISCcv1 by 5% on Monday, reaching their daily decline limit.

Judging by trade data, traders are gearing up for more price cuts.

Short positions managed on the WTI futures futures of the previous month, which would benefit from further price declines, have gone from a record low in July to a record number of short positions since October 2017.

(GRAPHIC: Brent put option prices – tmsnrt.rs/2R8bJvM)

In addition, the number of put – which give the trader the option but not the obligation to sell a financial instrument at a specified price – in February, Brent crude oil futures at 55 LCO5500N9 and $ 50 per barrel has reached record levels since October.

(GRAPHIC: Brent Sell Options – tmsnrt.rs/2R9W1jK)

The downward pressure comes from rising supply and slowing growth in demand, which should result in an oil supply surplus by next year.

"2019 will be a chaotic year for the oil market because issues regarding the prospect of a slowdown in the global economy and a supply surplus are expected to increase," said Monday the Fitch Solutions analysts.

Fitch said that even an expected supply cut led by the Organization of Petroleum Exporting Countries (OPEC) following an official meeting on Dec. 6 "may not be enough to counter the downside."

(GRAPHIC: World balance of supply and demand of crude oil – tmsnrt.rs/2PKtzIy)

Biggest decline

Oil markets are also affected by the slowdown in all financial markets.

"2018 has clearly marked the end of the 10-year Asian credit bull market due to tighter financial conditions in Asia (especially China), and we expect this to be the case in 2019," Morgan Stanley said in a statement. note published Sunday.

"We still do not think we are at the bottom of the cycle," the US bank said.

Oil markets also suffered from the strength of the US dollar .DXY, which leapt against most other currencies this year, due to rising interest rates that took money out of investors' hands. other currencies, as well as assets such as oil, considered riskier than the greenback.

"Everything against the USD is under pressure right now," McKenna said.

The trade war between the world's two largest economies, the United States and China, is another risk to global trade and global economic growth.

"The trade dispute between the United States and China represents a downside risk as we expect the United States to impose a 25% tariff on all imports from China by the first quarter 2019, "said US bank JP Morgan in a note released Friday.

(GRAPHIC: oil price compared to the Asian stock market – tmsnrt.rs/2R8dwku)