Oil de­clines after an OPEC-in­spired rally

Kuwait Times - - BUSINESS -

LON­DON: Oil prices fell yes­ter­day, re­turn­ing some of the gains made in one of the year’s big­gest ral­lies a day ear­lier, after in­dus­try data showed US crude stocks rose be­yond ex­pec­ta­tions last week to add to an over­sup­plied mar­ket. Global bench­mark Brent crude was down 39 cents at $46.56 a bar­rel at 0917 GMT. It closed Tues­day 5.7 per­cent higher on news that mem­bers of the Or­ga­ni­za­tion of the Petroleum Ex­port­ing Coun­tries would re­new ef­forts to limit pro­duc­tion.

US crude was 47 cents lower at $45.34 a bar­rel. “Prices are down on the build in US crude oil stocks re­ported by the API last night,” said Ta­mas Varga, oil an­a­lyst at Lon­don bro­ker­age PVM Oil As­so­ci­ates. Weekly US crude oil stocks surged by 3.6 mil­lion bar­rels last week, the Amer­i­can Petroleum In­sti­tute (API) in­dus­try group said, ex­ceed­ing an­a­lyst ex­pec­ta­tions of a 1.5-mil­lion-bar­rel rise. The news damp­ened a rally in­fused by news that OPEC mem­bers were meet­ing ahead of an of­fi­cial group gath­er­ing on Nov. 30 to build con­sen­sus for a deal to limit pro­duc­tion, and by oil pipe­line at­tacks by mil­i­tants in Nige­ria.

A num­ber of en­ergy min­is­ters from OPEC coun­tries are likely to meet in­for­mally in Doha on Fri­day to try to build con­sen­sus over de­ci­sions taken by the full group in Septem­ber in Al­giers, an Al­ge­rian en­ergy source said. “We es­ti­mate the pos­si­bil­ity of an ac­tual OPEC pro­duc­tion cut as 50-50,” said Hans van Cleef, senior en­ergy econ­o­mist at ABN Amro. “If OPEC would stick to its in­ten­tion to set its pro­duc­tion ceil­ing at 32.5 mil­lion bar­rels a day, or even lower, mar­ket op­ti­mism will likely pick up, which could be sup­port­ive for oil prices.” The Dutch bank low­ered its oil price fore­casts yes­ter­day, ex­pect­ing Brent and US crude to av­er­age $50 a bar­rel in the fourth quar­ter.

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