Crude oil futures were mixed during mid-morning trade in Asia Wednesday, with front-month ICE Brent crude trading below $50/b before posting a slight recovery from that level amid mild bargain hunting. Front-month NYMEX crude, on the other hand, posted gains from Monday's settle.
The February ICE Brent futures contract briefly traded below $50/b early Wednesday for the first time since July 2017, but recovered later to trade at $50.24/b, down 23 cents/b (0.46%) from Monday's settle as of 11:20 am Singapore time (0320 GMT), while the NYMEX February light sweet crude contract moved 12 cents/b (0.28%) higher at $42.65/b.
"Market activity is expected to be thin this week, considering it's the end of the year holiday season," said Benjamin Lu, investment analyst at Phillips Futures.
"Ailing sentiment continues to be behind the steep decline in prices with little to count on to stem the fall. While the typical fluctuation in prices could find some reprieve for prices in the day, the sustainability would be a question," said Pan Jingy, market strategist at IG.
Oil prices have been on a steady decline, reflecting the general sentiment seen in global markets, despite OPEC and its allies agreeing on production cuts.
"The weakness seen in the equities market is rubbing its effect on oil markets as well providing a bearish outlook for demand, " said Lu.
"Stop-loss sell orders have recently been adding to the downside pressure, with market participants continuing to question OPEC's ability to fully implement its agreed production cuts next year," said Hyejin Shin, commodity research analyst at Samsung Securities based in Seoul.
Meanwhile, OPEC and its allies have formalized their production quotas under their new supply deal, with Saudi Arabia, the world's largest crude exporter, committing to a 322,000 b/d cut from its October level.
That puts Saudi Arabia's cap at 10.311 million b/d, according to a document prepared by OPEC's secretariat and seen by S&P Global Platts, though the kingdom has pledged to go further than that, with energy minister Khalid al-Falih saying last week that production would fall to 10.2 million b/d in January.
"Though OPEC+ has mooted the possibility of further supply cuts amidst prolonged weakness in global oil benchmarks, we opine that markets will require solid indications for tightness in oil markets before a gradual recovery occurs in the coming term," said Lu.
As of 0320 GMT, the US Dollar Index was up 0.06% at 96.06.
