Oil Trades Above $60 on Signs of Saudi Confidence in Rebound [View all]
Source: Bloomberg
By Sharon Cho
Brent futures rose as much as 0.6 percent, gaining for the second time in three days. Saudi Arabia’s assumption of oil at $80 a barrel for next year is sending a message that the government expects a rebound in prices, according to John Sfakianakis, a former economic adviser to the kingdom’s finance ministry. Implied volatility for at-the-money options this week climbed to the highest since October 2011, data compiled by Bloomberg show.
Oil has declined 46 percent this year, poised for the biggest drop since 2008, as the Organization of Petroleum Exporting Countries resists supply cuts to defend market share while the highest U.S. production in three decades exacerbated a global glut. Crude prices are “fair” at about $70 to $80 a barrel, Iraq’s Oil Minister Adel Abdul Mahdi said.
“The market is fluctuating today as there’s less liquidity,” Will Yun, an analyst at Hyundai Futures Corp. in Seoul, said by phone today. “Uncertainties still linger in the market as OPEC and the U.S. haven’t signaled any output cuts or a slowdown in their production.”
Brent for February settlement advanced as much as 38 cents to $60.62 a barrel on the London-based ICE Futures Europe exchange and was at $60.37 at 10:15 a.m. Singapore time. The contract fell $1.45 to $60.24 on Dec. 24. The European benchmark crude traded at a premium of $4.24 to West Texas Intermediate. Prices have decreased 1.7 percent this week, set for a fifth weekly loss.
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Read more: http://www.businessweek.com/news/2014-12-25/oil-trades-near-56-as-saudi-budget-seen-as-sign-of-confidence
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