Energy
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Oil Prices Near 3-Month Lows

OPEC output hit a record of 33.64m barrels per day in October.OPEC output hit a record of 33.64m barrels per day in October.

Oil held steady around three-month lows on Monday, as the prospect of another year of oversupply and weak prices overshadowed chances that the Organization of the Petroleum Exporting Countries will reach a deal to cut output.

Brent crude futures were down 2 cents on the day at $44.73 a barrel, while West Texas Intermediate crude was down 2.8% at $43.41 per barrel, Reuters reported.

Donald Trump's surprise victory in last week's US presidential election has undermined much of the commodities complex, including oil, which has sagged as expectations that the world's largest exporters will agree to reduce output this month have waned.

"In the same way that a strong OPEC agreement was needed to continue the rally above $55, a lack of agreement will be needed to break below $40 and right now, we're at $45," Petromatrix strategist Olivier Jakob said.

"So I think on a risk basis, we're starting to be a bit more concerned about the upside price risk, than about the downside."

OPEC plans to cut or freeze output, but analysts doubt the group's ability to reach an agreement at its meeting on Nov. 30.

OPEC said on Friday its output hit a record 33.64 million barrels per day in October, and forecast an even larger global surplus in 2017 than the International Energy Agency on Thursday.

"OPEC knows what needs to be done but too few members will agree to take the production pain for the price gain, knowing also that the price gain incentivizes non-OPEC to produce more, lengthening the rebalancing process," PVM Oil Associates analyst David Hufton said. The dollar index hit an 11-month peak on Monday, driven by an aggressive sell-off in bonds that has pushed Treasury yields to their highest since January.

 

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