Oil prices steady ahead of OPEC meeting

Opec sources and analysts said the Saudi proposal would be hard to agree as Iraq is struggling to balance its budget despite soaring output and Iran has long argued its market share was stolen by rivals during the years of sanctions.

EI cited a group delegate it didn’t identify. He said in particular that the OPEC have-nots do not have significant other options, they would be still price-takers in a price war set to continue between Saudi Arabia and Russian Federation, with USA shale capping global prices in any case. Saudi Arabia has been the main opposition to production cuts.

Brent North Sea crude for January declined 53 cents to $43.91 per barrel.

“The market is a little bit skittish ahead of the OPEC meeting, it is going to be very range bound between now and Friday”, said Ben Le Brun, market analyst at Sydney’s OptionsXpress.

Alongside a move lower in metals prices – and with the U.S. dollar index near ten year highs – that drove the Bloomberg Commodity Index to a 16-year low.

“It’s not a matter of discussion with anyone to limit the level of production of Iran” below 4 million barrels a day, Oil Minister Bijan Namdar Zanganeh told reporters Thursday.

“We expect OPEC will likely maintain its production ceiling at the current level or adjust it upward slightly to reflect Indonesia’s re-joining the group while maintaining the goal of retaining market share in general”, analysis firm Wood Mackenzie said in an emailed statement.

OPEC’s crude production averaged 31.38 million barrels per day in October, according to OPEC’s recent monthly oil market report.

Oil fell below $44 a barrel on Wednesday as a rise in USA inventories added to the global glut and investors discounted the possibility of OPEC cutting output at this week’s meeting.

Iran, one of a dozen OPEC members, is expected to increase its oil exports after crippling Western sanctions are lifted under a deal reached with major world powers in July to curb its nuclear programme.

A strong USA dollar, which hit its highest against the euro in more than seven months on Wednesday, also weighed on oil prices.

The data also showed that US oil output rose to 9.2 million barrels a day last week.

Although the subsequent collapse in crude oil prices led to diminished rig counts and thousands of lost energy sector jobs in the us, the domestic fracking industry proved to be far more resilient than most anticipated.