Brent drops below $60, WTI near $50 on U.S. stockpiles, Opec uncertainty

Brent crude oil fell below $60 a barrel Wednesday, while West Texas Intermediate hovered over $50/Bbl, after U.S. crude inventories rose for the 10th straight week.

The market also remains queasy over whether Opec-led producing countries will reach an accord next week on output cuts.

Saudi Arabia said Wednesday it wouldn’t cut output if it was the only producer doing so, and Nigeria would not commit to curbing supply.

Crude futures briefly rebounded as U.S. equities jumped on comments from Federal Reserve chairman Jerome Powell that eased the market's fears about how quickly interest rates would be rising.

Brent crude yesterday dropped $1.05, or 1.7%, at $59.16/Bbl by 2:19 p.m. ET, after trading as low as $59.03/Bbl. U.S. West Texas Intermediate crude fell 88 cents, or 1.7%, to $50.68/Bbl.

U.S. crude stockpiles rose by 3.6 million barrels (Mmbbl) in the week ending Nov. 23. After falling to 2½-year lows in September, crude stocks have risen 14%, with 10 consecutive weeks of increases.

Brent’s price has dropped more than 30% from a four-year high above $86/Bbl in early October. Investors sold oil over worries about slowing economic growth in 2019, and Washington's decision to grant waivers to eight importers of Iranian oil – including its largest customers, China and India — after re-imposing sanctions on that nation Nov. 5.

The steady build in U.S. crude stocks is partly due to seasonal refining maintenance, but domestic production also has surged to a record 11.7 million barrels a day (Mmbpd).

The U.S. crude inventory sits at 450 million barrels (Mmbbl), adding to worries about a return of a worldwide supply glut.

Opec plus Russia and other producer-allies meet on Dec. 6. Producers are discussing a production cut of 1 Mmbpd to 1.4 Mmbpd.

The Opec meeting in Vienna will follow a gathering of the Group of 20 (G20) nations in Buenos Aires, Argentina, this weekend, at which oil policy is expected to be discussed.

Source: http://www.kallanishenergy.com/2018/11/29/brent-drops-below-60-wti-near-50-on-u-s-stockpiles-opec-uncertainty/