WTI Climbs From 2-Year Low on Cut in Saudi Oil SupplyAnthony DiPaola
West Texas Intermediate surged from its lowest closing price in more than two years as Saudi Arabia trimmed crude oil supply in September.
Futures gained as much as 1.7 percent in New York, recording the biggest increase since Oct. 17 and erasing an earlier fall of 0.6 percent. The biggest producer in the Organization of Petroleum Exporting Countries cut supply to markets by 328,000 barrels a day last month, to 9.36 million barrels a day, from 9.69 million in August, according to a person with knowledge of Saudi Arabia’s oil policy.
Crude has collapsed into a bear market as producers including Saudi Arabia cut export prices. Global supplies are rising as the U.S. pumps the most in almost three decades and Russia’s output nears a post-Soviet record. OPEC needs to reduce output by 500,000 barrels a day because the market is oversupplied, Samir Kamal, Libya’s governor to the 12-member group, said yesterday.
“The market is reacting instantly to any news on oil fundamentals,” Gerrit Zambo, an oil trader at Bayerische Landesbank in Munich, said by phone today. “The whole market has shifted much more toward reaction on supply news on the oil market rather than political moves.”
WTI for December delivery was at $81.09 a barrel in electronic trading on the New York Mercantile Exchange, up 57 cents, at 8:56 a.m. local time. Brent for December settlement rose 85 cents, or 1 percent, to $85.56 a barrel on the London-based ICE Futures Europe exchange.