Oil prices are concerned with the conflicting OPEC+ production reports

NEW YORK (Reuters) – Oil prices fell on Monday, but recovered some of the losses, after hitting their lowest since early January, on conflicting reports about whether Saudi Arabia and other OPEC oil producers were considering increasing daily production by half a million barrels.

Brent crude futures for January fell $1.41, or 1.6 percent, to $86.21 a barrel by 12:16 a.m. EDT (1716 GMT). US West Texas Intermediate (WTI) crude futures for December fell $1.69, or 2.1%, to $78.39 before the contract expires later on Monday.

Both benchmarks fell more than $5 a barrel earlier in the session after the Wall Street Journal reported that an increase of up to 500,000 barrels per day would be considered at the OPEC+ meeting on December 4.

Oil pared some losses after the official Saudi Press Agency reported that the kingdom was not discussing such a buildup. Read more

“It’s hard to believe they’re entering a market that trades primarily in contango,” said Bob Yawger, director of energy futures at Mizuho in New York, referring to the impact of oil futures trading at a discount on later-dated contracts. . “This is playing with fire.”

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, recently cut production targets and Saudi Arabia’s energy minister, the de-facto leader, was quoted as saying this month that the group would remain cautious.

Yewger said that the release of more oil amid weak Chinese demand for fuel and a strong US dollar could drive the market further into conservatism, encouraging more oil to go into storage and pushing prices lower.

Additional reporting by Noah Browning, Florence Tan and Emily Chow Editing by David Goodman, David Gregorio and Chris Reese

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