OPEC experts resume talks on oil output cut, delegates upbeat

Some warned a failure by the Organization of the Petroleum Exporting Countries to reach agreement at a November 30 meeting, or, more importantly to implement it, would send prices crashing as a two-year glut of crude remained unabated.

Traders said market activity was low due to the USA holiday, and there was a reluctance to take on big price directional bets due to uncertainty about a planned oil production cut, led by the Organization of the Petroleum Exporting Countries (OPEC).

Oil prices fluctuated throughout the day, starting lower in the morning and later briefly turning positive after the Energy Information Administration said U.S. crude stocks unexpectedly fell 1.3 million barrels last week after three straight weeks of builds.

But prices plunged again by the evening after two unnamed delegates told Bloomberg that the two-day gathering had failed to resolve the question of whether Iraq and Iran will join production cuts.

But both Iran and Iraq have said that they would not curb output in their resurgent oil industries.

Brent for January settlement dropped 32 cents, or 0.7%, to $48.80 a barrel on the London-based ICE Futures Europe exchange, a $1.16 premium to WTI.

Novak also disputed the 880,000 bpd figure and said that OPEC had earlier proposed that non-OPEC countries cut output by 500,000 bpd.

Oil prices surged 4 per cent to a three-week high on Monday, bolstered by growing conviction that major oil producing countries would agree next week to limit output. United States sweet crude lifted more than one per cent to $48.43, before slipping back to $48.18 a barrel.

In October, the cartel’s average production stood at 33.64m b/d, according to secondary sources cited by OPEC. Russian president Vladimir Putin commented on Sunday, November 20, that he sees “high probability” that the supply cut agreement will be reached in the producers’ meeting scheduled for November 30.

In addition to Iraq, Iran, Nigeria and Libya have also insisted they should be exempt from lowering their output.

In a scenario where OPEC members agree to material cuts, the analysts said crude oil prices would rise toward US$60 per barrel, from US$48.12 per barrel midday Wednesday.