Oil falls af­ter OPEC de­lays out­put de­ci­sion

The Korea Times - - WORLD -

NEW YORK (Reuters) — Oil fell more than 4 per­cent in choppy trad­ing on Thurs­day af­ter OPEC and al­lied ex­port­ing coun­tries ended a meet­ing without an­nounc­ing a de­ci­sion to cut crude out­put, and pre­pared to de­bate the mat­ter the next day.

The Or­ga­ni­za­tion of the Pe­tro­leum Ex­port­ing Coun­tries (OPEC) met in Vi­enna to de­cide pro­duc­tion pol­icy in co­or­di­na­tion with other coun­tries in­clud­ing Rus­sia, Oman and Kaza­khstan.

An OPEC del­e­gate said the or­ga­ni­za­tion had agreed on a ten­ta­tive deal to cut oil out­put but had not come up with a fi­nal fig­ure.

Ear­lier, Saudi En­ergy Min­is­ter Khalid al-Falih said OPEC needed Rus­sia to co­op­er­ate, and said a de­ci­sion was likely by Fri­day evening.

“If every­body is not will­ing to join and con­trib­ute equally, we will wait un­til they are,” al-Falih said.

Mar­ket watch­ers had ex­pected a joint cut of 1 mil­lion to 1.4 mil­lion bar­rels per day (bpd).

Brent crude fu­tures were down $2.57, or 4.2 per­cent, on the day to $58.99 a bar­rel by 11:41 EST (1641 GMT), off the ses­sion low of $58.36. U.S. crude fu­tures fell $2.37, or 4.5 per­cent, to $50.52 a bar­rel, bounc­ing off the ses­sion low of $50.08 a bar­rel.

The crude bench­marks have slumped about 30 per­cent this quar­ter.

Prices found sup­port briefly af­ter data showed U.S. crude stock­piles de­clined last week for the first time in 11 weeks. The United States be­came a net ex­porter of crude and re­fined prod­ucts for the first time since at least 1991, data from the U.S. En­ergy In­for­ma­tion Ad­min­is­tra­tion showed.

“Fears of a fur­ther es­ca­la­tion in the U.S.-China trade war, and po­ten­tial for OPEC+ not cut­ting oil pro­duc­tion deep enough will con­tinue to weigh on oil prices in to­day’s trad­ing ses­sion,” said Ab­hishek Ku­mar, Se­nior En­ergy An­a­lyst at In­ter­fax En­ergy in Lon­don.

“All eyes are now fix­ated on to­mor­row’s OPEC+ joint dec­la­ra­tion, and a com­bined out­put cut of at least 1 mil­lion bar­rels per day will be re­quired to see a mean­ing­ful re­cov­ery in oil prices.”

Euro­pean eq­ui­ties hit their low­est in two years and com­mod­ity-sen­si­tive cur­ren­cies such as the Rus­sian rou­ble fell sharply, in part be­cause of the slide in the oil price, but also with the ar­rest of a top ex­ec­u­tive of Chi­nese tech gi­ant Huawei in Canada for ex­tra­di­tion to the United States

The ar­rest came just as Wash­ing­ton and Bei­jing pre­pare for cru­cial trade ne­go­ti­a­tions.

Bar­clays said in its Global Out­look pub­lished on Thurs­day that “in­vestors need to lower their ex­pec­ta­tions” and “2019 should be a pe­riod of lower re­turns and higher volatil­ity.”

Bar­clays said it ex­pected “the global econ­omy to slow over the next sev­eral quar­ters” although it added that “not one ma­jor econ­omy is near re­ces­sion.”

U.S. crude in­ven­to­ries have climbed steadily as do­mes­tic pro­duc­tion surged to new peaks.

Reuters-Yon­hap

Saudi Ara­bia’s Oil Min­is­ter Khalid al-Falih talks to jour­nal­ists at the be­gin­ning of an OPEC meet­ing in Vi­enna, Aus­tria, Thurs­day.

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