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Hazloc Heaters
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Hazloc Heaters

Oil Near $58 as Traders Await Details on How OPEC+ Shares Cuts

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These translations are done via Google Translate

By Heesu Lee and Alex Longley

(Bloomberg) Oil traded near $58 a barrel as the market awaited crucial details on how OPEC+ will distribute cuts among its members.

Futures slipped 0.3% in New York having been whipsawed throughout the previous session after six hours of fraught OPEC ministerial talks. The group agreed to adjust its output target, but there were no details yet on how member countries will share the burden, and if it will result in additional barrels of oil coming out of the market. Saudi Arabia will hold its output steady at current levels under the terms of the adjusted OPEC+ deal, delegates said on Friday.

U.S. futures come under pressure on Friday

Oil is still set for a weekly gain because of shrinking American crude stockpiles and signs of progress on a possible U.S.-China trade deal. Following days of mixed messages, the shape of an OPEC+ deal emerged, but with few details. Russia, which has complied with its production quota for just three months of this year, had its proposal to exclude a very light oil called condensate approved on Thursday, potentially giving it space to keep pumping above its target.

“What they do in the second quarter remains unclear, on paper it is still heavily oversupplied,” said UBS Group AG analyst Giovanni Staunovo, referring to the entire group. “It will all come down to how they communicate it at the end.”

Sky Eye Measurement

West Texas Intermediate for January delivery fell 15 cents to $58.28 a barrel on the New York Mercantile Exchange as of 7:55 a.m. local time. Brent for February settlement lost 3 cents to $63.36 a barrel on the London-based ICE Futures Europe Exchange. The global benchmark traded at a $5.16 premium to WTI for the same month.

Sky Eye Measurement

See also: OPEC, Aramco Control Headlines More Than Oil: Liam Denning

OPEC+ agreed to curb its output quote by 500,000 barrels a day. But some analysts think just a reduction would largely be symbolic, as it simply formalizes the deeper cuts the group has been making for most of this year, rather than taking additional barrels off the market. The group is set to have further full ministerial meetings in March and June, a delegate said.

Other oil-market news
  • Saudi Aramco raised $25.6 billion from the world’s biggest initial public offering, closing a deal that became synonymous with the kingdom’s crown prince and his plans to reshape the nation.
  • At a time when U.S. refiners are ramping up to produce as much fuel as possible, refineries operated by embattled Petroleos de Venezuela SA are processing just one out of every 10 possible barrels.
  • Exxon Mobil Corp. said fuel deliveries from its Fos refinery in France have returned to normal after strikes on Thursday.
  • China will announce the creation of its long-planned national oil and gas pipeline company on Dec. 9, according to people familiar with the matter.

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