Published: Thu, December 27, 2018
Money | By Ethel Goodwin

Petrol Prices Hit 2018 Lows, Diesel Rates At Lowest Since March

Petrol Prices Hit 2018 Lows, Diesel Rates At Lowest Since March

Russian Energy Minister Alexander Novak said Tuesday that oil prices would become more stable in the first half of 2019. Meanwhile, the S&P 500 Index is at the brink of sliding into a bear market.

However, both crude benchmarks are still down roughly 40 percent from highs in October, pressured by concerns about oversupply and over the outlook for the global economy.

Russia-led OPEC is ready to reduce oil production by 1.2 million barrels per day from January 2019. A recovery in the US stock markets could help drive prices higher because of a shift in investor sentiment, but these gains are likely to be limited by rising concerns over a global economic slowdown.

On London-based ICE Futures, the price of Brent crude oil to be delivered in February advanced by $4.86, to $55.29 a barrel.

Prices plunged $3.35 to $50.47 on Monday. The market settled early ahead of the Christmas holiday.

At 1037 GMT, February WTI crude oil is trading $43.20, up $0.67 or +1.60% and March Brent crude oil is at $51.49, up $0.72 or +1.42%. The contract slumped $3.06 to $42.53 on Monday. Total volume traded was about 7% above the 100-day average.

While Opec and its partners are scheduled to meet in April, they can hold a meeting at any time if a quick response is required, Russia's Novak said in an interview with Rossiya 24 TV channel. The chance of another meeting by OPEC and its allies is "sending a signal to the market that they will do whatever it takes".

Shim Hye-jin, a commodity analyst at Samsung Securities in Seoul, said oil prices were still low despite gains made the day before.

The rise was preceded by declines in recent sessions, which extended weakness that started after the markets reached an early October peak for the year at over $76 per barrel of WTI and over $86 per barrel of Brent. Global stocks have had their most brutal month since 2008 on speculation that US Fed Chairman Jerome Powell's tighter monetary policy will weigh on growth.

"The growth of the vehicle culture in China, and in India (where in October, pre-sanctions, India's crude oil imports rose to their highest level in more than seven years - and a series of record-breaking months for auto sales) will continue to take up whatever excess supply we see in the global market", Yastine said. While the US president expressed confidence in Treasury Secretary Steve Mnuchin, the Fed and the economy on Tuesday, that hasn't calmed markets.

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