Oil Recovers After OPEC Sec Gen Issues Positive Remarks

Oil pared losses in New York and London after OPEC Secretary-General Abdalla El-Badri said insufficient investment could push prices to $200 a barrel.

Futures fell 0.2 percent in New York, erasing an earlier decline of 2.7 percent from the lowest close in almost six years. El-Badri hopes the oil market will recover in a “reasonable time” and OPEC is open to talks with producers outside the group, he said in an interview in London today. U.S. inventories climbed to the highest level for December since 1930, the American Petroleum Institute reported.

Oil slumped almost 60 percent since June as the Organization of Petroleum Exporting Countries resisted calls to cut output and the U.S. pumped at the fastest pace in more than three decades. Drillers in the U.S. have begun to idle rigs as falling prices make wells aiming to tap shale reserves unprofitable.

“El-Badri’s comments sparked a little rally,” Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York, said by phone. “We drilled it down very hard last night.”

West Texas Intermediate for March delivery dropped 14 cents to $45.45 a barrel in electronic trading on the New York Mercantile Exchange as of 9:27 a.m. local time. The contract lost 72 cents to $45.59 on Jan. 23, the lowest close since March 2009. The volume of all futures traded was 52 percent above the 100-day average for the time of day.

via Bloomberg

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza