LONDON (Reuters) – Oil fell to a one-month low below $90 a barrel on Friday, after a volatile previous session sparked by a U.S. pipeline explosion, as attention returned to next week’s OPEC meeting that is expected to boost output.
U.S. crude fell $1.11 to $89.90 a barrel by 1026 GMT, off lows of $89.52, a level not seen since Oct. 31. It had settled up 39 cents at $91.01 a barrel on Thursday after zipping as high as $95.17 earlier in the day.
Brent crude was $1.26 down at $88.96 a barrel.
“Now that we have broken $90, the momentum is starting to go to the downside. technically, $90 is a really key support level,” said Olivier Jakob of Petromatrix.
“There is room for the downside now. This is more of a structural correction,” he added.
An explosion along the Enbridge Pipeline, which supplies more than 10 percent of U.S. crude imports, killed two workers and choked off crude flows on Wednesday.
But the operator said on Thursday that three of the four pipelines shut had already been restarted, and that the remaining line could return to service within a few days, easing concerns of a severe supply disruption.
The U.S. Department of Energy said it was prepared to open up the emergency crude stockpile to compensate for the disruption, but had yet to receive any requests.
Traders said the market had by and large shrugged off the Enbridge impact, and the market’s focus had returned to the Organization of the Petroleum Exporting Countries (OPEC) meeting in Abu Dhabi on Dec. 5.
“We are now looking at OPEC, and we’re going to be running into the weekend looking at OPEC. It’s going to be the key. Will they, won’t they? And how much are they going to add on or not,” said Rob Laughlin at MF Global.
Some OPEC members favour an output increase, and the oil market is also betting the exporter group could decide to boost output by 500,0000 barrels per day (bpd). A similar OPEC meeting in September agreed to raise production by 500,000 bpd.
A Reuters poll of 21 banks, traders and consultants this week had 17 participants forecasting OPEC to raise output.
Oil had risen more than 40 percent since August and has come close to breaking the $100 mark, driven by the weak dollar, concerns over shrinking supplies ahead of winter and speculative plays.
But prices have fallen back lately amid rising worries about the strength of the U.S. economy, a rally in the dollar and expectations of a supply increase from OPEC.