Oil markets held their breath on Monday, the first trading day in December, despite signs of trouble in Asia and last week's static production signal from OPEC.
Brent, the global oil price benchmark, hovered near the $70 per barrel mark for the January contract, adding around 25 cents per barrel in early Monday trading.
Brent and other major indices suffered dramatic losses last week after the Organization of Petroleum Exporting Countries opted to keep production at 30 million barrels per day, saying market stability was needed to ensure producers receive a "decent income" while avoiding additional burdens to the global economy.
OPEC production leader Saudi Arabia broke its silence Monday on last week's decision. The Saudi government said the decision reflected the kingdom's interest in an oil market where OPEC and non-OPEC producers share joint responsibility in achieving stability.
OPEC's decision, however, was seen in some circles as a response to U.S. shale, where production is more expensive than elsewhere in the world. Some international companies have already cut their investment forecasts because of low oil prices, and several key U.S. shale producers saw their share values drop dramatically after last week's production decision.
West Texas Intermediate, the U.S. benchmark, traded more or less in parity with Brent, adding more than 30 cents per barrel for $66.45 for the January contract. Wood Mackenzie last week said prices near $70 for WTI are a threshold level for shale profitability, though the slump is "so far not a material threat to U.S. tight oil or the industries that surround it."
OPEC in its forecast said it expected global demand to increase modestly in response to economic recovery. On Monday, however, Moody's Investors Services downgraded Japan's credit rating for the first time since 2012, highlighting growing concerns about the resiliency of the Asian economic boom.
