Oil prices fall, profits return as Saudi TV reports production looming

NEW YORK, Nov 4 (Reuters) – Oil prices fell Thursday, reversing previous gains in a volatile session after a report that Saudi Arabia’s oil production will soon reach 10 million barrels per day for the first time since the onset of COVID-19 will exceed pandemic.

The report, from Saudi Arabia-owned Al Arabiya TV, came after the nation, along with other Organization of the Petroleum Exporting Countries and its allies, agreed to stick to previously agreed production increases.

Brent oil fell $1.45, or 1.8%, to settle at $80.54 a barrel. Earlier, Brent rose to $84.49 a barrel. US West Texas Intermediate crude fell $2.05, or 2.5%, to settle at $78.81 a barrel, well above the session high of $83.42.

Since Tuesday’s close, Brent and WTI are down about 5% and 6% respectively.

The Organization of the Petroleum Exporting Countries and allies, collectively known as OPEC+, agreed to stick to plans to increase oil production by 400,000 barrels per day (bpd) monthly, sources said, despite calls from the United States for additional oil production. delivery at cool rising prices. read more

Saudi Arabia has already rejected OPEC+’s calls for a faster increase in oil supply. But the Al Arabiya TV report said the Saudis will reach 10 million bpd in December.

Oil supplies will grow “huge” in late 2021 and early 2022 due to declining consumption, Saudi Energy Minister Prince Abdulaziz bin Salman said Thursday.

Oil prices, which had previously risen more than $2 a barrel, began to rise as OPEC+ met.

“There was a big (speculative) position loading” ahead of OPEC, said Bob Yawger, energy future director at Mizuho.

Yawger said traders then tended to sell and take profits rather than risk the market slipping further as the White House calls for more production.

“They would rather make a profit than be burned by a Biden counter-punch,” Yawger said, referring to US President Joe Biden.

The White House on Thursday criticized a decision by top oil producers to keep oil production stable, saying OPEC and its allies appeared “unwilling” to use their power to aid the global economic recovery.

Top producers Saudi Arabia and Russia are confident that higher oil prices will not provoke a rapid response from the US shale industry, OPEC+ sources say. US companies are committed to preserving capital and prioritizing investor returns. read more

Still, several major oil companies plan to increase production or shale spending next year. read more

Reporting by Stephanie Kelly in New York; reporting by Bozorgmehr Sharafedin in London and Florence Tan in Singapore Editing by David Gregorio, Will Dunham and Kirsten Donovan

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