Crude Oil Pared Losses amid Output Freeze Speculations

At around 1230 GMT (1700 IST), the USA benchmark West Texas Intermediate for November delivery, a new contract, pushed 84 cents higher at Dollars 44.89 per barrel. Forecasters in a Reuters poll had expected a 3.4 million-barrel build.

The announcement came just ahead of the critical Algeria meeting, where OPEC members and other major producers outside the cartel are expected to discuss production freeze. The October contract expired Tuesday after advancing 14 cents to close at $43.44.

The process of re-balancing the oil market must be “fast-tracked”, Barkindo said at a conference in Rome. OPEC is pumping out slightly more than 33.2 million barrels of crude oil per day, the volume, which is around its highest level ever.

Traders said that the main WTI price driver had been American Petroleum Institute data showing a 7.5-million barrel draw to 507.2-million barrels in USA crude inventories, the third weekly stock draw. OPEC plans to hold informal talks with competitor Russian Federation in Algiers, fanning speculation that producers may agree on an output cap to shore up prices.

In its latest report, the EIA said that gasoline inventories in the seven days to September 16 declined by 3.2 million barrels, after in the week before they rose by 600,000 barrels, sparking some bullish attitudes in an overall bearish environment. The price for Brent crude oil was down 1.65 percent to open at $45.19 per barrel. “Political tensions will prevent cohesion, and individual members will continue to protect market share from resilient non-OPEC producers”, BMI Research said in a note to clients.

Iran’s August crude exports jumped 15 percent from July to more than 2 million barrels per day (bpd), according to a source with knowledge of its tanker loading schedule, closing in on Tehran’s pre-sanctions shipment levels of five years ago.

He said the two factors being closely watched this week are the Federal Reserve’s decision on interest rates and stockpile numbers to be released by the US Energy Information Administration (EIA).

“Algeria has a proposal for participants in the Algiers meeting”.

Oil prices initially fell in the previous session on pessimism that OPEC members and other major crude producers will reach an output freeze deal during September 26-28 informal talks in Algeria.

“OPEC members will not agree on a production freeze”.