NEW YORK, Nov. 23 (UPI) ─ Crude oil prices were in flux early Monday on signs Saudi Arabia was willing to at least consider some level of cooperation on the global energy market.
Oil prices were sharply lower, moved back into positive territory and then drifted into the red again as the opening bell sounded in New York.
Early positive pressure resulted from comments from Saudi Arabia that it was ready to consider some level of cooperation on production.
“The Cabinet stressed the Kingdom’s role in the stability of the oil market, its constant readiness and continuing pursuit to cooperate with all oil producing and exporting countries,” a briefing from the official Saudi Press Agency read.
Saudi Arabia has signaled that, even though markets are showing a surplus, oil production needs to hold steady to account for future demand. The global economy, however, isn’t growing fast enough to take up the excess supplies.
Crude oil prices fell last week after the Saudi oil minister said energy companies should be investing heavily because demand was expected to return.
Markets largely brushed off the Cabinet reports from Riyadh by the open of trading on Wall St., however. Brent lost about 0.6 percent to start the day at $44.38. West Texas Intermediate, the U.S. benchmark price for crude oil, was off about 1.5 percent to $41.25 per barrel.
Venezuela, whose economy is suffering under the strains of a weakened oil economy, signaled oil prices could move below $30 per barrel without some level of coordination between major producing nations. Balance may be needed among wealthier members of the Organization of Petroleum Exporting Countries that can withstand the slump, like Saudi Arabia, and those that can’t, like Venezuela.
The exploration and production side of the energy sector, or upstream, continues to show signs of weakness. Data provided last week from oil field services company Baker Hughes show activity in the U.S. upstream sector dropped 1.3 percent from the previous week. Global activity was down 2.5 percent for the week ending Nov. 20.