Brent crude oil prices hit their lowest in almost 6 years today in a market readying for further falls and steel responded on the London Metal Exchange with steep price falls of its own. A big OPEC producer stood by the group’s decision not to cut output to tackle a supply glut.
On the contrary, the United Arab Emirates’ oil minister, Suhail bin Mohammed al-Mazroui, told Reuters on Tuesday that OPEC’s November decision not to cut output had been the right one.
“The strategy will not change,” he said. By not reducing output, “we are telling the market and other producers that they need to be rational.”
Canada, however, is responding to OPEC’s actions not by reducing its output of shale and oil sands production, but by digging in for the long haul.
On Monday, major producer Canadian Natural Resources Ltd. became the latest to underscore the resilience of oil-sands growth. The company told the Wall Street Journal lower oil prices will force it to trim investment on new projects and curtail its growth forecast—but it still expects overall output to grow about 7% over 2014 levels, and it vowed to keep spending on expanding output at its biggest oil-sands mine over the next 2 years.
Chinese steel closed mixed on Monday. The price of iron ore 58% fines from India hit a high price of CNY 840.00 ($135.30) and a low price of CNY 840.00 ($135.30) per dry metric ton. After falling 0.4% to CNY 2,690 ($433.28) per metric ton, the price of Chinese slab reached a 30-day low. After a couple of days of decreasing prices, the price of Chinese HRC held steady at CNY 3,000 ($483.21).
The steel billet cash price saw essentially no change on the LME for the fifth day in a row, remaining around $500.00 per metric ton. The steel billet 3-month price saw little movement on the LME at $480.00 per metric ton.
The US HRC futures contract spot price fell 0.5% to $594.00 per short ton. The US HRC futures contract 3-month price saw little movement on Monday at $597.00 per short ton.