Oil staged a small recovery but remained near a five-month low as concerns mount about robust supplies.

Global benchmark Brent climbed back above US$75 a barrel after slumping by 11 per cent in the longest run of daily losses since February.

In a sign there’s too much of some types of oil, key spreads are trading in a bearish contango structure. Traders have been expecting high crude exports from the U.S. and other non-OPEC producers, adding to greater volumes of lighter barrels across the globe. That has so far nullified a decision by producers in the OPEC+ group to curb output into 2024.

The total number of Brent futures contracts held by traders fell to the lowest since January this week, an indication that traders are closing out positions as prices plunge in the final month of the year.

Crude’s slide is also having wider ramifications. It has helped drag an overall commodity gauge to the lowest since 2021 while also pushing Russia’s key crude grade below a Group of Seven price cap for the first time since July.

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A procession of OPEC+ producers have made the case that their latest agreement will stick and could be extended. Saudi Arabia said earlier this week that cuts can “absolutely” stay past March, with similar remarks from Russia. While Algeria and Kuwait have added to the chorus, crude remains under pressure.

“The market has proved to be very disappointed in the OPEC+ measures,” Citigroup anlaysts including Max Layton and Francesco Martoccia wrote in a note, adding that the producers group could meet again before the end of the year.

Prices:

• Brent for February settlement rose one per cent to $75.34 a barrel at 10:29 a.m. in London.
• WTI for January delivery advanced one per cent to $70.31 a barrel.