Oil steadies after longest decline in five years

Oil steadied after concerns that supplies were overtaking demand triggered the longest weekly losing streak in five years.

Brent futures, the global benchmark, traded below $US76 a barrel after sliding for seven weeks in a row as traders shrugged off the latest announcement of production cuts by the OPEC+ alliance.

The market perked up briefly on Friday as the US announced plans to refill the Strategic Petroleum Reserve, and the country’s jobs report showed a better-than-expected reading. The busiest end-of-year travel season expected in the US since 2000 is also shoring up the demand outlook.

Yet, the spreads between monthly contracts – a critical barometer for supply and demand – continue to indicate weakness. Three-month spreads for both Brent and the American marker, West Texas Intermediate, are showing a discount on prompt versus delayed barrels, a bearish structure known as contango.

Oil has dropped by about a fifth since late September as output surges in the US and other key producers, while forecasters predict slower Chinese demand growth and lingering risks of a US recession.

At the same time, production cuts from Saudi Arabia and Russia, and pledges to prolong them if necessary, have failed to stem the slide. Citigroup said OPEC+ would need to extend the measures through next year just to support prices in a $US70 to $US80 range.