Investing.com - Oil futures tumbled to multi-month lows on Friday and booked their biggest weekly loss in almost a year amid mounting skepticism over the implementation of a planned deal by OPEC to limit production.
On the ICE Futures Exchange in London, Brent oil for January delivery fell to a session low of $45.08 a barrel, a level not seen since August 11. It was last at $45.58 by close of trade Friday, settling down 77 cents, or 1.66%.
For the week, it logged a decline of $4.13, or 8.3%, the biggest weekly loss since the middle of January, amid fading expectations of a coordinated production cut among major global oil producers.
Prices fell sharply on Friday after Reuters, citing an OPEC source, reported that Saudi Arabia threatened to raise its oil production at a meeting of OPEC experts last week if Iran refused to cap its output.
A short time later, Bloomberg News reported that OPEC Secretary General Mohammed Barkindo denied that the Saudis made the threat.
OPEC reached an agreement to cap output to a range of 32.5 million to 33.0 million barrels per day in talks held in Algeria in late September. However, the 14-member oil group said it won’t finalize details on individual output quotas until its next official meeting in Vienna on November 30.
The possibility that producers could walk away empty-handed from the November meeting looms large after Iraq, Iran, Nigeria and Libya all signaled they might not take part in the proposed production cut deal. Russia’s unclear stance is also fueling uncertainty.
Elsewhere, on the New York Mercantile Exchange, crude oil for delivery in December slumped 59 cents, or 1.32%, to end the week at $44.07 a barrel. The contract dropped to $43.57 earlier, the lowest level since September 20.
Prices stayed lower after oilfield services provider Baker Hughes said late Friday that the number of rigs drilling for oil in the U.S. last week rose by 9 to 450, resuming its rise following its first dip in roughly four months in the previous week.
New York-traded oil futures lost $4.63, or 9.5%, on the week, as investors reacted to a record weekly surge in U.S. crude inventories.
The U.S. Energy Information Administration said that crude oil stockpiles rose by a whopping 14.4 million barrels to 482.6 million last week, which the EIA considered to be “historically high levels for this time of year”.
In the week ahead, politics are expected to overshadow market fundamentals, with most of the focus falling on Tuesday's U.S. Presidential Election.
Meanwhile, market participants will eye fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of demand in the world’s largest oil consumer.
Oil traders will also keep an eye out for monthly reports from the International Energy Agency and the Organization of Petroleum Exporting Counties on Thursday and Friday respectively for fresh supply-and-demand signals.
In addition, investors will continue to pay close attention to comments from global oil producers to gauge their readiness on freezing or cutting output.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Tuesday, November 8
The American Petroleum Institute, an industry group, is to publish its weekly report on U.S. oil supplies.
Wednesday, November 9
The U.S. Energy Information Administration is to release weekly data on oil and gasoline stockpiles.
Thursday, November 10
The International Energy Agency will release its monthly report on global oil supply and demand.
Friday, November 11
The Organization of Petroleum Exporting Counties will publish its monthly assessment of oil markets.
Baker Hughes will release weekly data on the U.S. oil rig count.