Oil prices skyrocket, but stay on course for a third weekly decline

Oil futures reversed their course on Friday to rise, with market attention returning to concerns over global supply levels and the somewhat contradictory comments by Saudi Arabia's minister of finance. Energy, in recent days.

Prices, however, have remained on track to record a third weekly decline, as strong losses on global stock markets continue to weigh on the outlook for energy demand.

West Texas Intermediate gross for December delivery

CLZ8, + 0.37%

on the New York Mercantile Exchange, it rose 35 cents, or 0.5%, to $ 67.68 per barrel after previous losses brought prices down to $ 66.20. The US benchmark was on the way to a weekly decline of about 2.4%. December Brent

LCOZ8, + 0.65%

The global benchmark rose 46 cents, or 0.6 percent, to $ 77.35 a barrel, and is expected to fall 3 percent a week.

"In recent weeks, increasing production and exports between" OPEC and its friends "and the United States (notably in the form of SPR's unexpected publications) have weighed on the market side of the market. offer, "said Tyler Richey, co-publisher. Sevens report. "In addition, worries about the global economy, especially in this period of high market volatility, do not help buyers' arguments."

However, the Joint Ministerial Follow-up Committee "has expressed concern over rising inventories over the last few weeks and has highlighted impending macroeconomic uncertainties that may require a change of course," according to a press release dated Thursday. The JMMC is a group of oil ministers charged with overseeing the implementation of the production agreement effective January 1, 2017 between members and non-members of the Organization of Petroleum Exporting Countries.

JMMC asked the Joint Technical Committee to continue to monitor petroleum fundamentals and to "present options for production levels in 2019 to avoid the reoccurrence of a market imbalance." This suggests a possible shift in oil producers' efforts initiated in June to reduce production cuts. that have been in place since the beginning of 2017.

Recent comments from Saudi Arabia, de facto at the head of OPEC, sent conflicting messages to the market.

The recent "sharp drop in crude oil prices has pushed Saudi Arabia to think twice before increasing oil production," said Phil Flynn, senior market analyst at Price Futures Group.

Reuters reported that Saudi Energy Minister Khalid al-Falih told state-run television channel al-Ekhbariya: "We are (now) concerned about this increase," adding that 39, intervention may be needed to restore stability.

"The minister's remarks are somewhat surprising in that they are worried about the loss of Iranian supplies when US sanctions come into force next month," Flynn said. "However, market players are also concerned that global economic growth could slow down and continue to slow, which will ultimately hurt oil demand."

However, what makes Al-Falih's remarks "confusing … is that they rely on Falih's earlier statements that Saudi Arabia is ready to increase production to 12 million. [barrels a day] and invest in increasing its reserve capacity, "said Flynn.

Global equities were under pressure after a rebound on Thursday, as US stock indexes fell sharply on Wall Street. Losses on the equity markets fuel concerns about the economy and the demand for energy.

"Gross has evolved with the widespread sale of risky assets and we expect the liquidation of the length of money managed, which is concentrated at the beginning of the curve, to have a significant influence on the investment. 39, collapse of the backwardation, "said Jason Gammel, equity analyst. at Jefferies, in a note on Friday.

In retrocession, forward prices are lower than the spot market. In contango, the prices of future deliveries are higher than the spot market, which may encourage traders to store oil. The pressure on Brent saw the beginning of the futures curve register in the last two days, he noted.

At the same time, the market was "well stocked, largely because of increased production from Saudi Arabia and other countries before the full effect of US sanctions on Iranian exports on Nov. 4. "said Gammel. And it's also hard to ignore the rise in US crude inventories, with an increase of 28.7 million barrels of crude over the past five weeks, including the absorption of 3.5 million barrels of the strategic oil reserve, he said. And while the increase in crude inventories partly reflects seasonal factors, US energy inventories recorded only a slight decline of 10 million barrels over the same period.

Traders are also waiting for weekly data on the number of US oil rigs provided by oilfield services company Baker Hughes.

BHGE, + 0.31%

later Friday. He has reported increases in each of the last two weeks.

In the other energy exchanges, the essence of November

RBX8, + 0.16%

added less than 0.1% to $ 1.814 per gallon – a decrease of about 5.3% for the week, while November oil is

HOX8, + 0.94%

traded up 0.7% to $ 2.294 a gallon, looking at a weekly loss of 0.4%.

November natural gas

NGX18, -0.97%

which ended Monday, fell 1.5% to $ 3.153 per million British thermal units, with a weekly loss of 3%.

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