WTI Crude Oil and Natural Gas Forecast

Oil Price crash Crude limps to worst week in three years over glut fears

NEW YORK, Nov 23 (Reuters) - Oil prices plunged on Friday on concerns about oversupply, sending world stock markets lower as lagging energy shares weighed down Wall Street. Although the Organization of the Petroleum Exporting Countries is expected to curb output, rising US oil supply has fueled persistent concerns about a global surplus. The value of a barrel of oil has dropped by around 20 percent so far in November, in a seven-week streak of losses.

Brent's fall of more than five percent sent it sliding to $59.34 per barrel.

West Texas Intermediate crude (WTI) fell $3.37, or 6.2 percent, to $51.26 after briefly sliding about 7 percent below $51 a barrel in light trading due to the Thanksgiving holiday.

"Oil bears have re-asserted their authority", said Tamas Varga, analyst at London brokerage PVM Oil.

Saudi Arabia is considering another round of coordinated curbs to the oil output of OPEC member-states in connection with the rapid plunge in worldwide oil prices this month.

Volatility, a measure of investor demand for options, has spiked to its highest since late 2016, above 60 per cent, as investors have rushed to buy protection against further steep price declines. He explained the recent increase in crude production as a precautionary step taken ahead of the United States sanctions against Iran - which went into effect earlier this month.

Migrant caravan: Mexican officials deny United States border deal
Mexico's incoming deputy interior minister Zoe Robledo said details of the "Remain in Mexico" scheme were still being worked out. US President Donald Trump threatened on Saturday to close border with Mexico, if necessary, to fight illegal immigration.

High global oil production compared to demand was the main reason for Friday's selling, while the outlook for a weakening world economy led investors to conclude that growth would not be strong enough to absorb the surplus. One such bank is Societe Generale, which expects global oil demand to be "healthy", growing by 1.3 million bpd this year and 1.4 million bpd next year.

Adjusting to lower demand, OPEC kingpin Saudi Arabia has previously said it would be prepared to cut output by half a million bpd in order to tighten supply and reverse sharp price declines. "On the other hand, in the 1-in-3 probability that OPEC does not come to an agreement, there is still downside to Brent prices, although probably not much below the high-$50s in the next few months".

"In that scenario, Brent prices likely recover back into the $70s ..."

"Because the US has become such a large producer of oil, because of the fracking boom and other innovations in drilling.it's not such an easy thing to say that a drop in oil prices is unambiguously good for the USA economy", said Regan. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc.

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