Brent Remains Subdued On Oversupply Worries

Brent crude oil slipped below $83 on Thursday after making some gains on Wednesday following encouraging data from the United States. The commodity traded at $82.43 at 8:00 GMT on Thursday morning with oversupply weighing on prices.

On Wednesday, U.S. inventory data showed that the nation’s crude stocks increased less than expected last week. Crude stocks rose 460,000 barrels in the week that ended on October 31, much lower than forecasts for a 2.2 million barrel increase.

The commodity was also supported after news that Libya’s El Sharara oilfield was taken over by rebel gunman, highlighting the government’s struggle to maintain control. The oilfield’s seizure will remove about 200,000 barrels per day from the market, a significant portion of Libya’s output.

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Encouraging data from the United States also added support, though not enough to counter worries about the global supply glut. U.S. nonfarm payrolls data showed that employers added 230,000 new jobs in October. The figure came in above expectations and marks the United States’ best nonfarm payrolls report since June.

However, Brent quickly corrected lower as investors still saw the commodity as having weak fundamentals. The failing global economy and lack of demand is likely to keep Brent prices depressed through the rest of the year. OPEC is set to meet on November 27 to discuss whether or not to cut output in order to raise prices to the $100 level required by most members in order to balance their budgets.

The cartel remains divided though, with some nations like Venezuela, pushing for a cut and others, like Saudi Arabia and Iran, willing to accept low prices. CNBC reported that Saudi Oil Minister Ali al-Naimi sat down with Venezuela’s Foreign Minister Rafael Ramirez on Wednesday, presumably to discuss their nations’ differing viewpoints. However, neither side has made any comments since the meeting.