Oil Futures Drop to New Lows on Global Growth and Oil Glut Concerns
Oil futures slide as oversupply sentiment continues to dominate market chatter Reuters

Oil futures remained in negative territory on Friday (4 November) as traders continued to fret over Opec's ability to deliver on its promised production cut.

At 11.01am BST, the West Texas Intermediate (WTI) front month futures contract was down 0.11% or five cents to $44.62 per barrel, while Brent was 0.45% or 21 cents lower at $46.14 per barrel, as both contracts stayed within overnight ranges in Asian and early European trading.

As Opec struggles to come good on its pledge to lower headline production from 34.6 million barrels per day (bpd) to a 32.5 million to 33.0 million bpd range, Russia posted yet another growth in supply on account of new oilfields coming on-stream. Data obtained by Reuters pointed to headline Russian output averaging 11.23 million bpd in October; an increment of 60,000 month-on-month and 400,000 year-on-year.

While both Russia and Opec remain engaged in talks aimed at cutting production, former Saudi Oil Minister Ali Al-Naimi claimed in his memoirs published on Thursday (3 November), that past attempts at getting the Kremlin to cooperate on oil output cuts has almost always ended in failure.

Analysts at JBC Energy said bearish sentiment and fears of a supply glut were firmly entrenched in trading sentiment. "Pessimism continues after this week's huge US crude stock build and ongoing scepticism surrounding potential Opec action.

"Additionally, shipments from primary North Sea crude streams are set to rise some 10% month-over-month to a more than four-year high of 2.16 million bpd in December, according to data compiled by Bloomberg. Even news of an attack on Nigerian Forcados crude export infrastructure failed to support prices."

Away from oil market, gold stayed above $1,300 an ounce following an overnight uptick. At 11.16am BST, the Comex gold futures contract for December delivery was down a mere 0.05% or 60 cents to $1,302.70 an ounce.

Josh Saul, chief executive officer of The Pure Gold Company, told IBTimes UK that jitters over Brexit and the US elections were propping up purchases of physical gold.

"For the first time in decades, we are calling on gold in the ground in incremental volumes. Physical gold is in finite supply, and not many are selling. On the contrary, for first 10 months of the year, we have seen a 39% rise in purchases on an annualised basis. There are people who have never purchased physical gold before, but now feel inclined to do so, worried about the future."

Elsewhere, Comex silver futures slid 0.33% or 6 cents to $18.36 an ounce, while spot platinum was 0.23% or $2.34 lower at $993.85 an ounce.