Oil dips ahead of OPEC meet­ing

Business World - - World Markets -

NEW YORK — Oil prices dipped on Wed­nes­day ahead of a meet­ing of the world’s big­gest ex­porters, who will dis­cuss cut­ting out­put to help shore up prices and curb ex­cess sup­ply.

The Or­ga­ni­za­tion of the Petroleum Ex­port­ing Coun­tries (OPEC), Rus­sia and other pro­duc­ers will meet in Vi­enna this week to dis­cuss a po­ten­tial cut in pro­duc­tion. A mon­i­tor­ing com­mit­tee of OPEC and its al­lies, in­clud­ing Rus­sia, agreed on the need to cut oil out­put in 2019, two sources fa­mil­iar with the dis­cus­sions said, adding that vol­umes and the base­line for cuts were be­ing de­bated.

Brent crude fu­tures fell 52 cents to set­tle at $61.56 a bar­rel af­ter ear­lier reach­ing a ses­sion high of $63.29 a bar­rel and a low of $60.80.

US West Texas In­ter­me­di­ate (WTI) crude fu­tures fell 36 cents to set­tle at $52.89 a bar­rel. The con­tract traded be­tween $54.44 a bar­rel and $52.16 a bar­rel dur­ing the ses­sion.

Rus­sian En­ergy Min­is­ter Alexan­der No­vak told re­porters he had a “good” meet­ing with his Saudi coun­ter­part, Khalid alFalih, on Wed­nes­day and they planned more talks.

“All of us, in­clud­ing Rus­sia, agreed there is a need for a re­duc­tion,” Oman’s Oil Min­is­ter Mo­hammed bin Ha­mad Al-Rumhy told re­porters af­ter a min­is­te­rial com­mit­tee that groups Saudi Ara­bia, Rus­sia and sev­eral other pro­duc­ers met on Wed­nes­day.

OPEC wants to avert a buildup in global oil in­ven­to­ries like the one that sent prices from late 2014 into a pro­longed slump that brought Brent to be­low $30 a bar­rel at the start of 2016.

US Pres­i­dent Don­ald Trump pres­sured OPEC not to re­duce out­put. “Hope­fully OPEC will be keep­ing oil flows as is, not re­stricted. The world does not want to see, or need, higher oil prices!” Mr. Trump wrote on Twitter on Wed­nes­day.

“None of to­day’s com­ments should have come as a sur­prise since the key un­known re­mains the size of any such re­duc­tion and how the cuts are dis­trib­uted,” said Jim Rit­ter­busch, pres­i­dent of Rit­ter­busch and As­so­ci­ates.

“The Trump ad­min­is­tra­tion ap­pears to be main­tain­ing pres­sure on the Saudis to limit any pro­duc­tion cuts in pre­clud­ing sig­nif­i­cant price ad­vances from cur­rent lev­els. And the fact that Rus­sia still ap­pears some­what non-com­mit­tal would ap­pear to tilt odds in fa­vor of about a 1-1.1 mil­lion bar­rels per day re­duc­tion.”

Saudi Ara­bian crude sup­ply in Novem­ber rose to 11.3 mil­lion bar­rels per day (bpd) from Oc­to­ber’s 10.65 mil­lion bpd, a source fa­mil­iar with the mat­ter said.

US crude in­ven­to­ries rose by 5.4 mil­lion bar­rels in the week to Nov. 30 to 448 mil­lion, data from in­dus­try group the Amer­i­can Petroleum In­sti­tute showed on Tues­day. —

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