Investing.com - A 22% drop for November. That was the price West Texas Intermediate crude paid after the Russians stalled again on a production cut, sending the oil market to its biggest monthly loss in a decade.
U.S. crude futures finished with their worst month since 2008 after Russian Energy Minister Alexander Novak told domestic news service TASS that producers and consumers were comfortable with current prices. It was the clearest sign that Moscow saw little or no need to contribute to production cuts when it joins Saudi Arabia and other major oil producers at the OPEC+ meeting in Vienna on Dec. 6.
WTI, which teetered above and below $50 per barrel in Friday's early trade, settled down 52 cents, or 1%, at $50.93 per barrel. It sunk earlier to $49.66, its lowest level since Oct 2017. WTI's 22% loss for November was the second-straight double-digit monthly drop for U.S. crude after October's 11% decline. U.S. crude futures are now looking at a 16% loss for all of 2018, after being up more than 25% on the year at the start of October.
U.K. Brent, the global benchmark for oil, was down 67 cents, or 1.1%, at $59.24 per barrel by 2:48 PM ET (19:48 GMT). Earlier in the session, Brent fell to $58.05, and last week it broke below the $60 perch it had held since July 2017. For November, Brent was down 21%, with an 11% loss on the year.
While Russian minister Novak undoubtedly added to Friday's dour mood in oil, industry officials in Moscow seemed to be singing a different tune just a day ago, at least based on a Reuters report. Citing sources, the news service said the Novak had met with domestic crude producers and reached a consensus that an output reduction was necessary. WTI and U.K. Brent, the global benchmark for oil, settled up more than 2% on that speculation, one of the few decent rebounds for this month.
Data from U.S. oil services firm Baker Hughes also weighed on Friday's market as it indicated oil drillers added rigs for a third week in four and increased the rig count for the fifth-consecutive month, even though crude prices this week fell to their lowest level since October 2017. While there were only two new rigs this week to bring the count to 887, it added to the overall negative impact.
Just two months ago, oil prices were still rising, reaching four-year highs in October from a rally that began in May after President Donald Trump vowed to bring Iranian crude exports to zero under new sanctions.
But in under eight weeks, crude prices have lost more than a third of their value after Trump's sanctions proved tamer than thought and record U.S., Saudi and Russian output flooded the market with supply.
Equally damaging to the psyche of the market have been tweets from the president that the Saudis should not cut output, a directive traders had expected Riyadh to comply with, given its potential exposure to U.S. sanctions after the murder of journalist Jamal Khashoggi.
Aside from the Russian-Saudi OPEC theater on Friday, traders were also getting restless that the G20 meeting in Buenos Aires had not yielded any breakthrough yet on a potential U.S.-China trade deal, one of the few things that could boost global optimism and energy demand in the world's second-largest economy.
"Oil Is asking 'What’s new Buenos Aires?' " Phil Flynn, energy analyst at Chicago's Price Futures Group wrote in his daily note. "The big G20 meeting will basically tell the tale of oil going forward."
"Bottom line, OPEC needs to announce a big cut or it will be up to President Trump to cut a deal with China to save the price of oil."