The head of Russian oil company Rosneft, Igor Sechin, predicted an oil price of $50-$53 in 2019, a long way south of the four-year high of $86 for Brent crude reached earlier this year.
Those are the fundamental factors: the decrease of demand in winter and, of course, the macro economy as we've been witnessing a decline in global economic activity at the end of the year and a fall on the stock market, he said.
Crude was also caught up on the general risk-off market sentiment as the USA government shutdown, rising interest rates and the trade war between the us and China rocked the markets and exacerbated concerns over global growth.
USA crude oil prices jumped 3.5% to $44.04 per barrel after plunging 6.7% on Christmas Eve. The declines were led by Hess Corp., which lost 8.4 percent, the most in nearly three years, after Venezuelan forces temporarily halted ships working at a formation Hess and ExxonMobil are developing offshore Guyana.
While OPEC and its partners are scheduled to meet in April, they can hold a meeting at any time if a quick response is required, Russia's Novak said in an interview with Rossiya 24 TV channel. The measures might have to include deeper cuts seeing as the 1.2-million-bpd announced by OPEC+ earlier this month failed to impress a market in turmoil.
Both grades of crude are in a bear market, usually defined as a decline of at least 20 percent from a recent peak.
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U.S. crude futures settled at $42.53 a barrel, down $3.06, or 6.7 per cent. Brent crude futures settled down $3.35, or 6.2 per cent, at $50.47 a barrel.
"I think there is a little bit of over-extension to the downside linked to global market fears", Olivier Jakob, analyst at Petromatrix, told Reuters. The U.A.E.'s energy minister, while stressing that the 1.2-million barrel-a-day cut will clear an inventory buildup in the first half, hinted additional curbs could be discussed.
Due to the Christmas holiday, the API data will be released on Wednesday and the weekly EIA stock will be published on Friday.
"The market is still really concerned about demand", said Bernadette Johnson, vice-president in market intelligence at DrillingInfo in Denver.
Brent crude, the global benchmark, rose US$4, or 8 per cent, to settle at US$54.47 a barrel.
The Organization of the Petroleum Exporting Countries (OPEC) and its Russia-led allies agreed this month to slash oil production by more than the market had expected.