The world’s major oil producers are pushing back against downbeat sentiment in the crude markets.
OPEC’s latest monthly oil report says “oil market fundamentals remain strong despite exaggerated negative sentiments.”
The report by the Organization of Petroleum Exporting Countries points to “robust major global growth trends” including US economic data for the third quarter and upgraded Chinese economic growth projections of 5.4% for 2023.
OPEC analysts note the latest data shows Chinese crude imports increasing to 11.4 million barrels per day in October, on track to reach a new annual record high for this year.
The oil cartel attributes the recent downward trend in crude prices to “financial market speculators, as they have sharply reduced their net long positions over the month of October.”
“In total, they have sold an equivalent of more than 200 mb [million barrels] of oil since late September, or about 37% of total bullish positions. This has fueled market volatility and accelerated the price declines,” said the report.
On Monday, West Texas Intermediate (CL=F) edged higher, trading just above $77 per barrel. Brent (BZ=F) crude gained fractionally, hovering above $82 per barrel. The current oil price level is a stark difference from the 2023 highs in late September and a 28% rally in the third quarter.
On Friday crude posted its third consecutive week of losses, its longest losing streak since May. The decline follows a volatile period for crude after a surprise attack on Israel by Palestinian Islamist group Hamas.
OPEC is scheduled to meet on Nov. 26. The organization's current production cuts aimed at restricting supply and keeping a floor on crude prices are scheduled to continue through 2024.
Additionally, Saudi Arabia has unilateral cuts in place of one million barrels per day through year-end. Russia also has supply curbs in effect during the same time period.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on Twitter at @ines_ferre.
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