China Oil Exports Surge As OPEC Meeting Looms

Oil prices swooned Wednesday as pre-OPEC-meeting buzz and fresh export data out of China raised concerns that the global oil supply glut was gaining momentum.
Delegations from Saudi Arabia, Russia, Mexico and Venezuela gathered in Vienna on Tuesday ahead of OPEC's regularly scheduled Thursday conference. The four countries agreed to monitor prices, officials said afterward, but did not reach any conclusions on production. Differences of opinion on oil prices were evident in comments from Venezuelan Foreign Minister Rafael Ramirez, who told Russian news agency RT the group had agreed that current oil prices were too low, saying $100 a barrel was a fair price.
Igor Sechin, the head of Russian state oil company Rosneft, who also attended the meeting, told reporters that the decline in oil prices since July was "not critical."

 View Enlarged Image

Global oil prices slumped ahead of the Thursday meeting of the Organization of Petroleum Exporting Countries. The U.S. benchmark West Texas Intermediate slipped below $74 a barrel. Europe's benchmark Brent crude ended down 1%, below $78.
Ali al-Naimi, Saudi Arabia's oil minister, told reporters he expected the oil market "to stabilize itself eventually," further confirming the stance of the Saudis, OPEC's largest producer, as not in favor of cutting production quotas. In October, al-Naimi said oil "between 70 and 80 (dollars per barrel) is an ideal price," according to the Saudi Gazette.
On U.S. markets, investors responded by sending oil-related industry groups to seven of Wednesday's 10 largest losses among IBD's 197 industries.
Oil groups have also posted five of the seven largest losses among industries over the past four weeks.
On Wednesday, drillers were at the head of that contingent, with Bermuda-based Seadrill (NYSE:SDRL) diving 23% after missing Q3 earnings projections and terminating its dividend.
Switzerland-based driller TransOcean (NYSE:RIG) slumped 8%.
Data out of China compounded energy-market concerns. China's oil import demand rose 2.9%, year-over-year, in October, according to Platts, a commodity news service. But demand was down 2.5% vs. September, the report said. In addition, the country's year-to-date oil import and export levels were even, in what Platts described as an "unprecedented development."
China became a net oil exporter in October, as imports dived 22% and exports soared 30% to a record high. Data going forward suggest the country could become a net exporter of oil this year, according to Platts senior China writer Song Yen Ling.