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Oil prices fall despite planned OPEC output cut

Published 03/10/2016, 12:03 pm
Updated 03/10/2016, 12:10 pm
© Reuters.  Oil prices fall despite planned OPEC output cut
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* Brent crude slips away from $50 per barrel

* OPEC production likely to hit new high in September

* Doubt that planned OPEC cut is deep enough to balance market

By Henning Gloystein

SINGAPORE, Oct 3 (Reuters) - Oil prices fell away from $50 per barrel on Monday despite last week's agreement by exporters to cut output, with traders doubting the step was big enough to rein in production that has exceeded consumption for the better part of three years.

Brent crude futures LCOc1 were trading down 35 cents, or 0.7 percent, at $49.84 per barrel at 0053 GMT.

U.S. West Texas Intermediate (WTI) futures CLc1 were down 40 cents, or 0.83 percent, at $47.84 a barrel.

Oil trading activity will be limited on Monday as public holidays in China and Germany mean Asia's and Europe's biggest markets are shut.

The price falls came despite last week's agreement by members of the Organization of the Petroleum Exporting Countries (OPEC) to cut output to between 32.5 million barrels per day (bpd) and 33.0 million bpd from about 33.5 million bpd, with details to be finalised at OPEC's policy meeting in November. said prices went lower despite the announced cuts as overproduction remained in place for the time being, and because the planned intervention might not be sufficient to bring production back to, or below, consumption.

"OPEC has created its own Q4 risk to oil prices ... In raising expectations of a November deal to cut production, it also risks a steep price decline should it fail to achieve its goal of cutting output back to less than 33 million bpd," Barclays (LON:BARC) said in a note to clients.

The market scepticism stems from the fact that OPEC production has so far chased new records for much of this year as rivalling members like Saudi Arabia, Iran and Iraq are reluctant to give away market share.

As a result, OPEC's oil output is likely to reach 33.60 million bpd in September from a revised 33.53 million bpd in August, its highest in recent history, a Reuters survey found on Friday. that, the British bank said that it did not expect a repeat of the price crash seen late last year after a rally earlier in 2015.

"We think oil prices, and commodities more generally, will avoid the Q4 price crash that has become a feature of the market in recent years," it said, pointing to an improving Asian economic growth outlook, falling oil supplies and rising investor interest in oil markets as main support factors for this year.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ OPEC, non-OPEC production

http://tmsnrt.rs/2ctYZNY OPEC's struggle

http://tmsnrt.rs/2cWq5NN

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