Published: Thu, December 27, 2018
Markets | By Erika Turner

Oil prices surge as US equities soar

Oil prices surge as US equities soar

Brent crude oil futures were down 29 cents, or 0.57%, at US$50.18 a barrel and earlier fell to the lowest since July 2017.

Sechin, an ally of Russian President Vladimir Putin and a critic of OPEC, said the price slump was mostly linked to the USA rate hike announced last week. In the oil market, traders are skeptical that OPEC's output cuts will be enough to balance supply and demand.

"The plan (to cut oil production) is well studied but if it does not work, we always have the power in OPEC to call for an extraordinary meeting", he added.

Unrefined has been made up for lost time in more extensive budgetary market shortcoming as the U.S. government shutdown, higher U.S. financing costs and the U.S. - China exchange question startled speculators and exacerbated stresses over worldwide development.

"The last few days of selling pressure in the crude markets has felt less fundamentally driven and more a function of the overall market meltdown as increased equity volatility and growing macro concerns have weighed on a number of asset classes", analysts at Tudor Pickering Holt & Co. said in research note Wednesday.

Both grades of crude are in a bear market, usually defined as a decline of at least 20 percent from a recent peak. The U.A.E.'s energy minister, while stressing that the 1.2-million barrel-a-day cut will clear an inventory buildup in the first half, hinted additional curbs could be discussed.

Syrian army sends reinforcements towards Kurdish-controlled Manbij
But Erdogan's main objective in Syria is actually to target the YPG, which the USA has trained to spearhead the fight against IS. On Monday, Iraq said it could consider deploying troops inside Syria to protect Iraq from threats across its borders.

Aama said oil market oversupply had fallen to 37 million barrels of crude in November from 340 million barrels in January 2017, when OPEC and its allies began cutting production in an attempt to lift the price of crude.

Meanwhile, WTI recouped some of the losses suffered over the last few days, trading up 2.61 percent at US$43.64 a barrel at the time of writing, after losing 6.7 percent and closing at US$42.53 a barrel in the last session.

"I think there is a little bit of over-extension to the downside linked to global market fears", said Olivier Jakob, analyst at Petromatrix. "For now, those statements are ignored by the market because we are in this bearish cycle". Total volume traded Monday was about 42 percent below the 100-day average ahead of the Christmas holiday Tuesday.

Brent crude, the global benchmark, rose US$4, or 8 per cent, to settle at US$54.47 a barrel.

"The market is still really concerned about demand", said Bernadette Johnson, vice-president in market intelligence at DrillingInfo in Denver.

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