Oil Falls With Equities as Venezuela Tour Doesn’t Deliver Deal


Oil fell for a third day in New York to trade near $30 a barrel as equities declined and no supply agreement emerged from Venezuela’s tour of crude-producing nations.

Futures fell as much as 2.7 percent. Saudi Arabian Oil Minister Ali al-Naimi met his Venezuelan counterpart Sunday in Riyadh, the Middle East nation’s Petroleum Ministry said in a statement, without mentioning any steps to shore up the market. Speculators’ short positions on crude were near a record while longs were at the highest since June, increasing total wagers to unprecedented levels, data from the U.S. Commodity Futures Trading Commission show.

“Venezuela’s quest to broker talks between OPEC and non-OPEC was doomed from the very beginning,” said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt. “It just showed how desperate some of the oil-producing countries are now.”

Crude is down about 18 percent this year as Iran ramps up exports after the removal of sanctions and U.S. crude stockpiles swell. Prices will remain low for as long as 10 years as Chinese economic growth slows and the American shale industry acts as a cap on any rally, according to Ian Taylor, chief executive officer of Vitol Group BV, the world’s largest independent oil trader.

West Texas Intermediate for March delivery dropped as much as 83 cents to $30.06 a barrel on the New York Mercantile Exchange and was at $30.23 as of 11:37 a.m. London time. The contract fell 83 cents to $30.89 on Friday. Total volume traded Monday was 21 percent above the 100-day average.

Brent for April settlement was at $33.47 a barrel on the London-based ICE Futures Europe exchange, down 59 cents. The contract slid 2 percent last week. The European benchmark crude was at a premium of $1.29 to WTI for April.

Equities Drop

European stocks are down for a sixth day, the cost of protecting European banks’ and insurers’ senior debt is on its worst run since March 2013 and yields on Germany’s 10-year bunds are the lowest since April. The Stoxx Europe 600 Index slid 2.4 percent at 11:20 a.m. in London.

Venezuela’s Oil Minister Eulogio Del Pino met al-Naimi after visiting Russia, Iran, Qatar and Oman on a tour to drum up support for a coordinated approach to stem the slide in prices. Six members of the Organization of Petroleum Exporting Countries and two non-OPEC producers would be open to attending an extraordinary meeting if one is called, the South American country said last week.

“It’s hard to see a dramatic price increase,” Vitol’s Taylor told Bloomberg in an interview. Oil is likely to bounce between $40 a barrel and $60 for the next decade, with a midpoint of $50, he said. The trading house also confirmed it had purchased crudefrom Iran after sanctions were lifted.

Rising shale output has expanded U.S. stockpiles above 500 million barrels to the highest level since 1930, according to monthly data compiled by the Energy Information Administration. Rigs targeting oil in the nation’s fields fell by 31 last week to 467, the lowest since March 2010, Baker Hughes Inc. said on its website Friday.

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