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Brent crude oil dips below $50 on doubts OPEC can coordinate output cut

Published 27/10/2016, 11:45 am
© Reuters.  Brent crude oil dips below $50 on doubts OPEC can coordinate output cut
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By Henning Gloystein

SINGAPORE, Oct 27 (Reuters) - Oil prices were below $50 per barrel on Thursday on doubts OPEC will be able to bring together its members and Russia to organise a coordinated crude production cut.

International Brent crude oil futures LCOc1 made a push above $50 per barrel early on Thursday, but had dipped back to $49.91 by 0034 GMT, 7 cents below their last closing price.

WTI futures were trading at $49.17 per barrel, down 1 cent from their previous settlement.

Traders said Brent was struggling to break above $50 over doubts that the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers like Russia will be able to effectively coordinate curbs in output to prop up prices.

"Investors remain uncertain as to whether OPEC can implement the tentative agreement to cut production," ANZ bank said on Thursday.

A cut is being pushed by Saudi Arabia, OPEC's biggest producer, and it is being supported - at least by word - by Russia, not a member of the cartel but the world's biggest oil producer.

However, OPEC's No.2 producer, Iraq, has said it would not cut output, arguing it needs the revenue to fight Islamic State, and the government is trying to lure in investors to boost production further from its current record 4.43 million barrels per day. U.S. crude markets, West Texas Intermediate (WTI) futures CLc1 received early support from a 553,000-barrel draw in crude inventories to 468.16 million barrels. EIA/S

But some analysts said that the drop in stocks was misleading.

"The decline of 553,000 barrels last week was centred on the west coast, which is isolated from the rest of the network. Inventories actually increased along the East and Gulf Coasts," ANZ bank said.

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