Oil ends steady; Saudi pledge, glut worry causes wild ride

An oil pump of Cuba's state-run CUPET is pictured near the coast in Mayabeque province

Brent settled steady and U.S. crude slightly lower on Monday after prices were whipsawed by volatility as Saudi Arabia pledged to work towards oil price stability but traders worried about a global supply glut and signs of rising U.S. stockpiles.

Crude rallied early after Saudi Arabia pledged to work towards oil price stability. A run-up in U.S. gasoline and ultralow sulphur diesel (ULSD) futures also boosted the petroleum complex.

But prices gave back gains on signs of a growing glut.

Market intelligence firm Genscape reported a build of 2.2 million barrels at the Cushing, Oklahoma delivery point for U.S. crude futures for the week ended Nov. 20, traders who saw the data said.

Analysts polled by Reuters forecast that data would probably show crude inventories across the United States rose by 1.1 million barrels last week.

“The overarching concern in this market is the growing inventory levels for crude, and that doesn’t seem to be easing despite the strong refinery runs we’ve been having,” said Phil Flynn, analyst at the Price Futures Group in Chicago.

Brent futures LCOc1 settled up 17 cents at $45.83 a barrel.

U.S. crude’s West Texas Intermediate (WTI) futures CLc1 finished the session down 15 cents at $41.75.

The Saudi statement came as oil held barely above 2-1/2-month lows, and was greeted with a mix of enthusiasm and scepticism. Despite similar pledges before, the Saudis and other big OPEC producers have kept output high to maintain market share, and crude prices have halved over the past year. OPEC’s next meeting on production targets is on Dec. 4.

U.S. gasoline RBc1 rose about 2 percent, settling up for a fourth straight day, while ULSD HOc1 finished firm, helping shore up some sentiment in the petroleum complex. Traders bought those refined products amid strong demand for gasoline at pumps and colder weather in Northeastern United States, which should boost demand for heating oil, or ULSD.

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