Oil Price - Nov 8: Where is the bottom?

[dan_s]

U.S. WTI settled $1 down, or 1.8%, at $60.67 per barrel, after hitting an 8-month low at $60.56. WTI is down 21% since hitting four-year highs of nearly $77 in early October. This selloff feels overdone to me and now that the midterm elections are over, Saudi Arabia can ignore Trump and do what is in their best interest. We should see a spike in demand for home heating oil as the first true taste of winter heads across the Northeast this weekend. - Dan

"The market is almost daring OPEC to do something now," said John Kilduff, oil trader and partner at New York energy hedge fund Again Capital. "We have an OPEC meeting this weekend and I find it hard to believe they are not going to get together and try and talk this market back up."

The Joint OPEC-Non-OPEC Ministerial Monitoring Committee, which includes Saudi Arabia and other major Middle Eastern oil producers along with Russia, will be meeting this weekend in Abu Dhabi.

That will be followed by OPEC's monthly meeting in Vienna on Dec. 6, where production quotas are usually finalized. Russia will be meeting with OPEC a day after that, in line with the cooperation that has existed since 2015 between the cartel and Moscow to intervene in any collapse in global oil prices.

With Thursday's slide, WTI has settled down without a pause since Oct 29. The last time it experienced such a losing streak was between June 26 and July 9 2014, when it fell 10 sessions in a row.

Brent crude was down $1.37, or almost 2%, to $70.70 per barrel by 2:55 PM ET (19:55 GMT). That was almost 20% off Brent's four-year highs of nearly $87 hit last month.

Tariq Zahir, who trades long-dated spreads in WTI at Tyche Capital Advisors in New York, also believes OPEC will intervene to try and pull the market higher.

"But the markets are most likely going to break $60 first as the record highs in U.S. production is a bigger worry for now," Zahir said

[dan_s]

Raymond James 11/6/2018:
"With deteriorating supply outlooks for both Iran and Venezuela and a very disruptive IMO 2020 on the horizon, the backdrop for oil prices only seems to continue to improve. And despite the recent pullback in front-month WTI, the 12-month strip remains well above year-ago levels thanks to a much less backwardated curve."