U.S. West Texas Intermediate (WTI) price remain below $50 per barrel in early Asia trade Monday, as prices remain under pressure after the Russian Energy Minister Friday said he was not committing to sign a production deal with Organization of the Petroleum Exporting Countries at this week’s World Energy Conference.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in November CLX6, -0.86% traded at $49.35 a barrel, down $0.46, or 1%, in the Globex electronic session. December Brent crude LCOZ6, -0.75% on London’s ICE Futures exchange fell $0.42, or 0.8%, to $51.51 a barrel.
News that Russia was not committed to a deal continued to reverse gains oil made last week, which had largely come on reports that the country would meet with key
In late September, the 14-member group agreed to cut between 200,000 barrels and 700,000 barrels a day of their output to alleviate the global oil glut that has weakened prices for more than two years. The group, which controls more than one third of the world’s oil production, said it also wants the participation of non-OPEC producers in a concerted efforts to curb production.
Furthermore, reports that Iraq and Iran won’t be at the meeting in Turkey have also highlighted problems with the proposed production cuts.
OCBC Bank remains unconvinced that any oil output cut will deliver a meaningful and sustained rise in oil prices given the many loopholes in the agreement including the absence of non-OPEC involvement, the absence of Iran, Libya and Nigeria’s involvement, and any individual country quota measures, the bank said in a note.
However, the World Energy Conference will remain a key focus for the global oil prices this as the market tries to anticipate the outcome of the next OPEC meeting next month.
“All eyes will be on headlines from Istanbul this week. As long as talks all point to an agreement in November, prices will remain supported,” said Stuart Ive, private client adviser at OM Financial in Wellington, New Zealand.
Nymex reformulated gasoline blendstock for November RBX6, -0.81% — the benchmark gasoline contract — fell 126 points to $1.4692 a gallon, while November diesel traded at $1.5706, 87 points lower.
ICE gasoil for October changed hands at $461.75 a metric ton, down $5.50 from Friday’s settlement.
Source: Market Watch, 10 Oct. 2016
