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Oil prices ended higher on Monday, backing the news that the European Union would support the French government's decision to punish Iranian nationals linked to a bomb plot in France.
"Oil traders are now considering the possibility of the EU joining the United States in taking a tough stance on Iran, and perhaps this time there will be no derogation or a way for Iran to sneak [oil] offer, "said Phil Flynn, Senior Market Analyst at Price Futures Group.
Reuters reported Monday that EU ministers had announced that technical work on freezing the assets of two Iranians and Iranian intelligence services could begin on a failed plot to attack a rally near Paris.
Oil traders, meanwhile, have also estimated the likelihood that major producers who will meet early next month decide to significantly reduce production in order to avoid an expected global overabundance of crude supplies.
December West Texas Intermediate Brut
CLZ8, + 1.26%
nailed on 30 cents, or 0.5%, to settle at $ 56.76 a barrel on the New York Mercantile Exchange after trading at as little as $ 55.08. The December contract expired at Monday's settlement. January WTI gross
CLF9, + 1.06%
which is now the first month contract, set at $ 57.20, up 52 cents, or 0.9%.
A feeling of oversupply, including in the latest US data, has maintained a general downward pressure on prices, which had reached their highest level in almost four years in early October, before plunging into a bear market.
WTI prices fell 6.2% last week. A weekend recovery for the WTI allowed the benchmark to end what had been a record-breaking series of drops in 12 sessions, which allowed Nymex to finish at $ 55.69 at one point. This was the lowest closing price for a contract at the beginning of the month since November 16, 2017.
While the Organization of the Petroleum Exporting Countries "continues to think of the idea of further cuts to curb the recent oil slide, Russia has seemed less favorable, potentially placing a heavier burden on Saudi Arabia for any coordinated action, "said Robbie Fraser, Vice President. commodity analyst at Schneider Electric.
"Geopolitics further complicate Saudi Arabia's decision to limit supply, as tension with countries, including the United States, remains high after the assassination of journalist Jamal Khashoggi," he said in a note.
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January Brent Global Benchmark
LCOF9, + 0.12%
added 3 cents, or less than 0.05%, to $ 66.79 a barrel on Monday. Closing at $ 65.47 a barrel on ICE Futures Europe last week, it officially joined its US counterpart in a bear market, set as a retreat of at least 20% from a recent peak.
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Evidence of weakening global economic growth and the Trump administration's decision to grant waivers to major buyers of Iranian crude following the adoption of sanctions have fueled selling pressures. Sanctions had been planned to prevent the bulk of Iranian oil from entering the market.
At the same time, the United States, Russia and Saudi Arabia, both major producers, are pumping crude to record levels, resulting in a much higher supply than world demand, revealed last week. monthly update of the International Energy Agency.
However, the fall in prices prompted OPEC and its allies, including Russia, to say earlier this month that they could proceed to a joint reduction of their production. Such an initiative would come just months after the group decided to increase production after more than a year of slowing down. The enlarged group then meets on 6 December.
"Even more limited discussions by OPEC could be the speculative bullish catalyst needed to trigger a strong comeback of the $ 60 WTI, but it will probably not be sustainable unless there is a substantial change in the fundamentals of the WTI. market, which are decidedly biased. in favor of the bears right now, "Tyler Richey, co-editor of the Sevens Report, told MarketWatch.
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Meanwhile, natural gas in December
NGZ18, + 7.51%
up 10% to $ 4.70 per million British thermal units. Natural gas futures ended last week up 14.9%, after settling in the middle of the week at the highest for more than four years.
December Essence
RBZ8, -0.04%
increased by 0.4% to $ 1.583 per gallon, while December heating oil
HOZ8, + 0.65%
climbed 0.6% to $ 2.086 per gallon.
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