OIL UPDATE Oil falls on doubts over extended output cuts

SINGAPORE: Oil prices fell on Wednesday on doubts Opec and Russia will agree an extended crude production cut that the market has priced in, and after a report of an unexpected rise in US fuel inventories.

US West Texas Intermediate (WTI) crude futures were at $57.72 a barrel at 0130 GMT, 27 cents, or 0.5 per cent below their last settlement.

Traders said WTI was pulled down by a report from the American Petroleum Institute (API) on Tuesday which showed US crude inventories rose by 1.8 million barrels in the week to November 24 to 457.3 million barrels.

Brent crude futures, the international benchmark for oil prices, were at $63.27 a barrel, down 34 cents, or 0.5 per cent.

Oil prices have received a broad push this year, with Brent up by 40 per cent since mid-2017, due to an effort by the Organization of the Petroleum Exporting Countries (Opec) and a group of other producers, led by Russia, to withhold 1.8 million barrels per day (bpd) of output.

The deal expires in March 2018, but Opec will meet today to discuss its policy.

“Market whispers suggest Saudi Arabia and Russia are not yet fully coordinated,” said Stephen Innes, head of Asia-Pacific trading at futures brokerage OANDA.

Opec and Russia are expected to extend their supply cuts for the whole of 2018 but with an option to review the deal in June, Opec sources said, after Moscow expressed concerns the market could overheat.