Crude Prices Swing Between Gains, Losses -- Update
November 12 2019 - 4:26PM
Dow Jones News
By Sarah Toy
Crude futures swung between small gains and losses on Tuesday
after the Organization of the Petroleum Exporting Countries and its
allies signaled they were planning to maintain their current curbs
on crude output through next year, holding off on more aggressive
cuts.
U.S. crude pared gains from earlier in the day, falling 0.1% to
$56.80 a barrel, while Brent, the global gauge of prices, fell 0.2%
to $62.06 a barrel.
Shale companies are pushing U.S. oil and natural-gas production
to record levels, adding to a glut that has held down crude prices
for years. Some U.S. producers recently signaled that they are
planning to pull back production in the coming year, but OPEC,
locked in a years-long struggle with U.S. producers for
pricing-power primacy, is wary they will follow through.
"There is always a risk that if we cut deeper and prices rise,
those [U.S.] companies could change their plans to hike
production," a Gulf OPEC delegate said. "OPEC would ensure that
won't happen."
Some analysts are convinced that the cartel and its allies will
eventually decide to pull production back more, pointing to Saudi
Arabia's interest in pushing up prices ahead of the initial public
offering of the state-owned Saudi Arabian Oil Co., or Aramco.
"[The Saudis] will want to have strong oil prices going into the
final pricing of their IPO," wrote Edward Moya, senior market
analyst at Oanda, in a Tuesday note.
During OPEC's December meeting, de facto leader Saudi Arabia is
expected to pressure overproducing countries like Iraq and Nigeria
to comply with the cartel's pact to cut collective production by
1.2 million barrels a day. That would effectively result in deeper
oil-production cuts, which could help bolster prices.
Elsewhere in commodities, natural-gas prices pared gains from
earlier in the day, falling 0.6% to $2.62 per million British
thermal units.
Write to Sarah Toy at sarah.toy@wsj.com
(END) Dow Jones Newswires
November 12, 2019 16:11 ET (21:11 GMT)
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