Oil drops as Opec meets to discuss output quotas
london — US oil was set for the first weekly drop since mid-September as an Opec committee met in Vienna on Friday to discuss output quotas for members participating in an agreement to cut production.
Futures slid as much as 0.6 per cent in New York and are down 2.7 per cent for the week. Brazil will attend the Organisation of Petroleum Exporting Countries gathering on Saturday, joining other producers from outside the group, including Russia, as the bloc that controls about 40 per cent of world production seeks non-member cooperation on reducing output. Saudi Arabia and its Gulf allies are willing to drop in futures in New York for the week cut 4 per cent from their peak production, Reuters reported, citing people familiar with the matter.
West Texas Intermediate for December delivery was at $49.48 a barrel on the New York Mercantile Exchange, down 24 cents, at 9:38am in London. The contract gained 54 cents to $49.72 a barrel on Thursday. Total volume traded was about 52 per cent below the 100-day average. Prices are set for the first weekly drop in six weeks.
Brent for December settlement was 15 cents lower at $50.32 a barrel on the London-based ICE Futures Europe exchange. Futures rose 49 cents, or 1 per cent, to $50.47 a barrel on Thursday. Prices are down 2.8 per cent this week. The global benchmark crude traded at a premium of 81 cents to WTI.
Oil has fluctuated near $50 a barrel amid uncertainty about whether Opec can implement the first supply cuts in eight years at its official November meeting. The Opec committee will try to resolve differences over how much individual members should produce, with Iraq saying on Sunday it should be exempt because of conflict with militants. — Bloomberg