THE WALL STREET JOURNAL
Price Holds Steady Friday as Traders Debate Outcome of OPEC Gathering
Oil futures sprang back from lows to end all but unchanged Friday, reflecting uncertainty over supply as members of the Organization of Petroleum Exporting Countries headed into a Saturday meeting.
Light, sweet crude for January delivery settled down 1 cent from its Wednesday close at $54.43 a barrel on the New York Mercantile Exchange. Oil jumped $4.50, or 9%, for the week, although it dropped $13.38, or almost 20% for November, its fifth consecutive monthly decline.
With oil prices off more than $90 from this year’s historic highs, OPEC has in the past two months announced output reductions totaling about two million barrels a day. Many analysts expect the organization to cut output further, but they’re unsure of when.
Delegates arriving for the meeting in Cairo held differing views.
“We’re not expecting a decision for the time being,” said Kuwait’s oil minister, Mohammad Al Olaim. “It’s only a consultative meeting.” OPEC has another gathering scheduled for Dec. 17 in Algeria.
Rafael Ramirez, oil minister of Venezuela, an OPEC price hawk, with a national budget strained by crude’s plunge, said his country would propose a cut of at least a million barrels a day as an option.
Oil traded lower for most of the session, rallying at the end of the day.
“It’s in response to the potential for a cut at the OPEC meeting Saturday,” said Timothy Jennings, president of Vantage Trading in New York. “You don’t want to be caught short.” Oil-futures markets will be closed until Sunday.
Although OPEC meets about 40% of the world’s oil needs, its pricing muscle has weakened as global demand suffers the effects of an economic slowdown. Oil demand in the U.S. is 6.6% lower than a year ago, the Energy Information Administration reported this week. Japan, the world’s No. 3 oil-consuming nation, reported Friday that its crude imports declined 7.7% in October from a year earlier.
With many U.S. traders taking a long weekend after the Thanksgiving holiday, volume was light.
“Some of today’s price volatility is definitely a result of a lack of participants in the market today,” said Gene McGillian, an analyst at brokerage Tradition Energy in Stamford, Conn.
Crude also found late support as U.S. stock markets rallied.
In other commodities markets on Friday:
NATURAL GAS: Futures fell on a milder temperature outlook and diminished concerns over winter supplies. The drop erased much of the gains from a rally Wednesday after a U.S. government report showed a larger-than-expected withdrawal of gas from storage last week. Gas for January delivery on the New York Mercantile Exchange settled floor trade down 36.8 cents, or 5.35%, at $6.510 a million British thermal units.
SOYBEANS: Prices fell on the stronger U.S. dollar along with position-squaring ahead of the end of the month. Late-day buying helped the market cut earlier losses. Chicago Board of Trade January soybeans fell 3 cents a bushel to close at $8.83.
Reem Shamseddine and Benoit Faucon in Cairo contributed to this article.Write to Gregory Meyer at email@example.com