Oil held losses near $46 a barrel as worries over U.S. supplies and the global economy overshadowed signals from OPEC that it may extend or even deepen its pledged output curbs.
Futures were little changed in New York, after declining 11 percent last week — the most since January 2016. Officials from Iraq, Kuwait and the United Arab Emirates agreed with Saudi Arabia’s expectation that the group will extend its cuts for another six months.
The U.A.E.’s energy minister, while stressing that the agreed 1.2 million barrel-a-day reduction will clear a glut in the first quarter, hinted additional curbs could be discussed.
The market remains skeptical over the effectiveness of the curbs by the Organization of Petroleum Exporting Countries and its allies including Russia because of surging American shale production.
While the U.S. is pumping at record levels and inventories are also high, President Donald Trump’s trade war with China and the Federal Reserve’s rate-hike policy are raising concerns over the health of the global economy. Prices have collapsed 40 percent from a four-year high in October.
“Incredibly, in the face of even deeper production cuts, petroleum markets have hit fresh lows,” said Stephen Innes, the head of trading for Asia Pacific at Oanda Corp. in Singapore. “While the production cut should restore a semblance of supply balance in the first half of 2019, global growth concerns and shale production have investors deeply concerned.”
West Texas Intermediate for February delivery was at $46 a barrel on the New York Mercantile Exchange, up 41 cents, at 1:10 p.m. in Seoul. The contract lost 0.6 percent to close at $45.59 on Friday. Total volume traded was about 15 percent above the 100-day average.
Brent for February settlement was 58 cents higher at $54.40 a barrel on London’s ICE Futures Europe exchange. Prices declined 10.7 percent last week to settle at $53.82. The global benchmark crude traded at an $8.41 premium to WTI.