Cyber Monday Deal: Up to 60% off InvestingProCLAIM SALE

UPDATE 9-Oil falls more than 3 pct on doubts over OPEC cut

Published 30/11/2016, 01:29 am
© Reuters. UPDATE 9-Oil falls more than 3 pct on doubts over OPEC cut
GS
-
BARC
-
LCO
-
CL
-

* OPEC members split over who should cut output and how much

* Indonesia energy minister says not sure deal can be done

* Non-OPEC member Russia not participating in talks

* Asian OPEC buyers eye alternatives if OPEC cuts output (Updates prices in paragraph 6)

By Christopher Johnson

LONDON, Nov 29 (Reuters) - Oil prices fell more than 3 percent on Tuesday on signs leading oil exporters were struggling to agree a deal to cut production to reduce global oversupply.

The Organization of the Petroleum Exporting Countries will meet in Vienna on Wednesday aiming to implement a deal outlined in September to cut output by around 1 million barrels per day (bpd), from around 33.82 million bpd in October. OPEC/O

But key OPEC members appear to disagree over details of the plan and some analysts have suggested the meeting may fail to reach a deal or produce one that is unworkable. Energy Minister Ignasius Jonan said he was not sure OPEC would clinch a deal to limit oil output when it met.

"I don't know. Let's see. The feeling today is mixed," he told reporters when asked about the prospects of a deal.

Brent crude oil LCOc1 was down $1.80 a barrel at $46.44 by 1425 GMT. U.S. light crude oil CLc1 was down $1.75 at $45.33.

Non-OPEC producer Russia confirmed on Tuesday it would not attend the OPEC gathering, but added that a meeting between the group and non-affiliated producers at a later stage was possible. is set to be high in the oil market in the days ahead," analysts at Barclays (LON:BARC) said.

Intense negotiations would be needed on Wednesday to cement a deal, Goldman Sachs (NYSE:GS) GS.N analysts said.

"The latest headlines suggest that while there is a broad agreement on the rationale for a cut, political considerations and country level quota negotiations are so far preventing a deal from being reached," Goldman Sachs said.

There remains disagreement among OPEC members over which producers should cut by how much. OPEC agreed a production cut to 32.50 million bpd, crude prices would likely rise to the low $50s a barrel, Goldman said.

Both Goldman and Barclays said oil prices would quickly move above $50 per barrel if a production cut is agreed by OPEC.

"If no deal is reached, our expectation of rising (crude) inventories through 1H 2017 would warrant prices averaging $45 per barrel through next summer," Goldman said, noting a move to below $40 per barrel would be difficult to sustain.

In Asia, OPEC's biggest customer region, oil importers made clear that they would not be happy with an artificial supply cut that hikes prices, and that in case of a cut they would seek more supplies from outside OPEC.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.