OPEC ‘not ready’ to cut supply

West Texas Intermediate for September delivery fell 95 cents US, or 2 per cent, to US$47.57 a barrel at 12:41 p.m. on the New York Mercantile Exchange.

Russian Energy Minister Alexander Novak hosted OPEC Secretary-General Abdullah al-Badri to discuss short-term market tends and long-term prospects in the crude oil market. “The fall in Chinese equities shook investor confidence and that’s why we saw a lot of retracement in commodity prices”.

Brent was down 70 cents at $52.61 a barrel by 0935 GMT after settling 7 cents lower in the previous session. Output by the Organization of Petroleum Exporting Countries decreased 362,000 barrels to 32.107 million a day this month, according to a Bloomberg survey of oil companies, producers and analysts.

The OPEC chief said he didn’t expect prices to fall further because demand was growing. Japan’s crude oil imports fell by 2.50% in June 2015-compared to past year.

“I don’t know what OPEC means by a stable oil price but my guess is that approximately $65 for Brent anWTId $60 for WTI is about right to promote its objectives of regaining market share, getting some relief from negative cash flow and, at the same time, keeping prices below the threshold for expensive competition from deep water oil, oil sands and all but the best tight oil production”, said Berman.

“What’s happening is the market is coming to terms with the fact that these lower prices have not resulted in any significant change in supply/demand economics”, ICAP oil broker Scott Sheldon said.

“We are also hopeful that Opec will agree on a stricter quota discipline at its December meeting”, Weinberg said.

The steep falls in the oil prices since June 2014 were caused by slowing global economic growth and the oversupply of oil by certain countries.

On Thursday, Badri said he expected oil prices to stabilise next year and to remain so over the long term.

“Therefore we, Russian Federation and OPEC members, being responsible participants on the global oil market, should conduct our policy based on the full … understanding of its key factors and characteristics”.

“Despite constant reservations, there may be possible indications of achieving more balanced crisis inside the oil market and to support it by 2016, a legal desire for the…”

The US Energy Information Administration (EIA) data this week revealed a rise in total US crude stocks at 1.969 billion barrels.