Oil slips on uncertainty over Opec output cuts

new york — Oil prices settled below $50 on Friday to mark their biggest weekly loss in six weeks, on concerns Opec will not fully carry out a planned output cut, even as data showed US oil drillers removed rigs from production for the first time since June.

Oil services firm Baker Hughes said two rigs were cut last week, ending a 17-week recovery in the number supplying the market.

But the market’s attention remained on disagreements within the Organisation of the Petroleum Exporting Countries (Opec), said James L. Williams, energy economist at WTRG Economics in London, Arkansas. “A two-rig count is not significant one way or another. That could just be somebody moving rigs.”

Brent crude futures fell 76 cents, or 1.5 per cent, to $49.71 a barrel. It hit a session low of $49.31. US West Texas Intermediate crude fell $1.02, or two per cent, to $48.70 a barrel. It hit a low of $48.42.

The benchmarks showed a weekly drop of about four per cent, the biggest since mid-September.

Oil prices had slipped further on news that the Federal Bureau of Investigation found additional e-mails relating to Democratic presidential nominee Hillary Clinton’s past use of a personal server for her work as US secretary of state. The US stock market reversed gains.

A falling dollar, which makes crude priced in greenbacks cheaper for holders of other currencies, later pared losses, but news of division at Opec’s Vienna meeting kept prices in the negative.

Opec officials and counterparts from non-member producers such as Russia started two-day negotiations on Friday in Vienna on limiting output to curb a global glut that has weighed on markets for two years.

As of late Friday, they had yet to agree on details on the plan to curtail output to between 32.5 million and 33 million barrels per day, with Iran opposing, sources said. Iraq, Opec’s second-largest producer, has also opposed cuts.

“Iraq and Iran are disputing Opec’s production numbers,” Phil Flynn, analyst at Price Futures Group in Chicago, said of the baseline for setting output quotas. “My feeling on the Opec situation is that it’s not going to be easy.”

The Opec is expected to meet on November 30 to finalise how much each individual member should cut.

Russia, which postponed its domestic production-cut meeting to a week before Opec’s meeting, expects a quick recovery in US shale oil activity so that an output freeze could be short-lived, Interfax news agency reported. — Reuters