Oil extended declines as worries over rising U.S. supplies and the global economy overshadowed signals from OPEC that it may extend or even deepen its pledged output curbs.
Futures fell as much as 1.9 percent in New York, with U.S. equity index futures also turning lower. Officials from Iraq, Kuwait and the United Arab Emirates agreed with Saudi Arabia’s expectation that the group will extend its cuts for another six months. They will have to contend with U.S. producers, which added 10 oil rigs last week, according to Baker Hughes data, even as the nation’s output stays near record high levels.
The U.A.E.’s energy minister, while stressing that OPEC and its allies’ 1.2 million barrel-a-day reduction will clear a glut in the first quarter, hinted additional curbs could be discussed. But investors remain skeptical. President Donald Trump’s trade war with China and the Federal Reserve’s rate policy are raising concerns over global economic growth. Oil prices have collapsed more than 40 percent from a four-year high in early October.
“The main input over the weekend has been the continued intervention by OPEC members,” said Olivier Jakob, managing director at Petromatrix GmbH. “For now, those statements are ignored by the market because we are in this bearish cycle.”
West Texas Intermediate for February delivery was at $44.91 a barrel on the New York Mercantile Exchange, down 68 cents, at 7:50 a.m. local time. The contract lost 0.6 percent on Friday. Total volume traded Monday was about 20 percent below the 100-day average.
Brent for February settlement was 46 cents lower at $53.36 a barrel on London’s ICE Futures Europe exchange, after declining 11 percent last week. The global benchmark crude traded at an $8.47 premium to WTI.
Suhail Al Mazrouei, the U.A.E.’s energy minister, said that OPEC has the option to hold an extraordinary meeting to decide on more output cuts if the current one isn’t enough. At a press briefing in Kuwait, ministers from Iraq, the U.A.E. and Algeria took turns repeating the message that OPEC will deliver its production curbs and continue to work with its allies.
In the U.S., producers put 10 more oil rigs to work last week, taking the total to 883, according to Baker Hughes data released Friday. More than 100 rigs have been added across American fields this year.
Other oil-market news: Hedge fund wagers on U.S. crude reached their most pessimistic level in more than two years. A diesel glut in Asia is encouraging traders of the fuel to ramp up cargoes from India to Europe, where stockpiles were ravaged by refinery halts and unusual weather earlier this year. Oman, the largest non-OPEC Arab crude producer, said average daily oil and condensates production rose to 1 million barrels a day last month.