Brent and West Texas Intermediate rebounded from the lowest closing levels in more than five years amid signs that US oil producers were curbing investment as price competition intensified between OPEC’s largest members.
Brent crude for January delivery was down 28 cents at $65.91 a barrel on Tuesday after falling as low as $65.29, its weakest since September 2009, Reuters reported. Brent dropped 4.2 percent or $2.88 on Monday in its third-largest one-day loss this year.
Supply and demand will set the price of oil in coming months, an oil official from the United Arab Emirates said on Tuesday, in the latest sign OPEC Persian Gulf producers are ready to weather lower prices after declining to cut output last month.
Industry sources said top OPEC exporter Saudi Arabia would keep crude sales at full contracted volumes for Asian term buyers in January, while the head of Kuwait's national oil company said on Monday oil would remain around $65 for months.
Commodity prices took some support on Tuesday from a dip in the dollar, which slid by about 0.6 percent against a basket of currencies, though it remains up about 12 percent since May. A weaker US unit makes commodities priced in the dollar cheaper for holders of other currencies.
Brent averaged around $110 between 2011 and 2013 and topped $115 in June. Losses accelerated in late November after OPEC decided against reducing its output target, despite its forecasts of a surplus and calls from members including Iran and Venezuela to cut production.
Since then, Saudi Arabia and second-largest OPEC producer Iraq have cut monthly prices for the United States and Asia, in a move some analysts say shows OPEC members are competing for market share. New US projections show oil production from the big three US shale plays should grow by more than 100,000 barrels per day by January.
However, many shale companies are starting to make deep cuts to spending for next year.
