Oil halted its three-day decline near $45 a barrel as Saudi Arabia sees low prices spurring demand growth.
Futures rose as much as 1.2 percent in New York after falling 7.5 percent through the three days ended Friday. Demand will soon reflect the “attractiveness” of current price levels, according to Ali al-Naimi, Saudi Arabia’s oil minister. Money managers’ net-long position in West Texas Intermediate rose the most in seven months in the week ended Nov. 3, data from the U.S. Commodity Futures Trading Commission showed.
Oil has slumped 42 percent the past year amid speculation the global oversupply will persist as the Organization of Petroleum Exporting Countries continue to pump more than their collective quota. While China’s crude imports fell to about 6.23 million barrels a day in October, the lowest level in five months, purchases were more than 9 percent higher than the same period last year, according to data Sunday from the General Administration of Customs.
“If there is some uniformity in global growth, we can see demand coming back,” David Lennox, an analyst at Fat Prophets in Sydney, said by phone. “At the moment, supply can adequately meet demand and the risks are to the downside for oil.”
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WTI for December delivery climbed as much as 51 cents to $44.80 a barrel on the New York Mercantile Exchange and was at $44.72 at 2:26 p.m. Singapore time. The contract lost 91 cents, or 2 percent, to $44.29 on Friday, the lowest close since Oct. 27. The volume of all futures traded was about 30% percent above the 100-day average.
Brent for December settlement was 46 cents higher at $47.88 a barrel on the London-based ICE Futures Europe exchange. Prices fell 4.3 percent last week. The European benchmark crude was at a premium of $3.15 to WTI.
Many Asian countries welcome the recent decline in oil, and demand “will soon reflect the attractiveness of the current prices,” Saudi Arabia’s al-Naimi said in an article posted on the on the International Energy Forum’s website. A global surplus will continue for as long as five years as producers in the Middle East increase output, Mohammed Al-Shatti, Kuwait’s representative to OPEC, said in an interview Saturday in Doha.
Speculators’ net-long position in WTI increased by 28,761 contracts to 172,052 futures and options, CFTC data show. Shorts shrank by 17,395 contracts while longs increased by 11,366.
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