Oil down on strong dol­lar, OPEC log­jam

Kuwait Times - - BUSINESS -

LON­DON:

Oil prices slid yes­ter­day, dragged by a strong dol­lar and un­cer­tainty over whether OPEC will agree to cut pro­duc­tion at the group’s meet­ing next week, but bench­mark con­tracts were on track to close the week with gains close to 4 per­cent.

Brent crude fu­tures were trad­ing at $48.53 a bar­rel at 1253 GMT, down 47 cents. US crude fu­tures fetched $47.56 a bar­rel, down 40 cents. Over­all ac­tiv­ity on both con­tracts was thin af­ter the US Thanks­giv­ing hol­i­day and ahead of the week­end. The main drag on prices was the dol­lar, which this week hit lev­els last seen in 2003 against a bas­ket of other cur­ren­cies . A strong dol­lar could crimp fuel de­mand due to higher costs for hold­ers of other cur­ren­cies.

Re­ports that state oil gi­ant Saudi Aramco would in Jan­uary in­crease oil sup­plies to some Asian cus­tomers also cast a shadow on mar­kets, traders said.

A de­cline in China’s Oc­to­ber crude oil im­ports to their low­est on a daily ba­sis since Jan­uary added to the bear­ish tone. But an­a­lysts said fun­da­men­tals were lit­tle changed apart from con­cerns over the fate next week of a Saudi-led plan for the Or­ga­ni­za­tion of the Petroleum Ex­port­ing Coun­tries and other pro­duc­ers to agree on cuts in crude out­put.

The mar­ket “is tak­ing it easy ahead of a long week­end (in the United States) and un­cer­tainty over OPEC,” said Bjarne Schiel­d­rop, chief com­modi­ties an­a­lyst with SEB Bank in Oslo. “There is no other big bear­ish news.”

Schiel­d­rop said prices could re­bound if the Nov. 30 meet­ing suc­ceeded in reach­ing a tar­geted pro­duc­tion cap of 32.5 mil­lion to 33.0 mil­lion bar­rels per day (bpd), from the 33.64 mil­lion bpd the group pumped in Oc­to­ber. On Thurs­day, the oil min­is­ter of non-OPEC nation Azer­bai­jan said OPEC was also push­ing oil pro­duc­ers out­side the group to make big cuts in out­put. Most an­a­lysts ex­pect some form of cut, but it is un­cer­tain whether that would be enough to prop up a mar­ket dogged by over­sup­ply since 2014. — Reuters

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